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Compare refinancing your mortgage versus investing the closing costs. Calculate payback periods, NPV analysis, and see which option maximizes your wealth over time. Perfect for homeowners deciding between refinancing and investment opportunities.

Your Current Mortgage

$

Proposed Refinance

$

Horizon & Investing

Advanced (optional)

Refi monthly payment
$1,918
  • What this is: your new monthly principal + interest payment.
  • Old payment $2,111 → New payment $1,918.
  • Calculated from $320,000 at a 5.25% note rate over 300 months.
Scheduled payment difference
$193
  • Calculation: $2,111 − $1,918 = $193 saved each month.
  • After either loan pays off, the model continues investing the full payment advantage through the selected horizon.
Classic payback (undiscounted cash flow)
24 mo (2 yr)
  • Cumulative scheduled-payment savings recover the closing costs in about 24 months.
  • Add a discount rate to see NPV payback (accounts for time value of money).

At-your-horizon snapshot

Remaining balance if you DON'T refi
$273,334
Remaining balance if you DO refi
$267,594
Interest paid (no-refi)
$130,653
Interest paid (refi, after modeled deduction)
$108,672
Investment (refi path)
$18,461
Investment (no-refi path)
$5,806
Verdict
Refinance

Refinancing wins by $18,394 in projected net worth at 7 years. The comparison invests each path's monthly payment advantage through the same horizon and includes both remaining loan balances.

What "wins" means in dollars:
  • Refi path @ 7y: −$267,594 (loan) + $18,461 (invested payment/tax advantages) = -$249,134
  • No‑refi path @ 7y: −$273,334 (loan) + $5,806 (invested closing costs/payment/tax advantages) = -$267,528
At 7 years, you'd be about $18,394 better off refinancing.
  • Classic payback ≈ 24 months (2 yr).

What does the discount rate for NPV mean? It's your personal hurdle rate or the return you'd want to compensate for risk. In NPV payback, we discount future monthly savings by this rate. If that sentence felt too mathy, skip it—the classic payback is fine for quick decisions.

Model is a simplification. For precise tax advice, talk to a professional.

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