No-Cost Refi Break-Even Calculator
Compare standard refinance vs no-cost (lender credit) refinance. Higher rate trades for $0 closing — see when each wins based on hold period.
| Standard Refi Payment | — |
| No-Cost Refi Payment | — |
| Monthly Extra Cost (No-Cost) | — |
| Standard Closing Costs | — |
| Break-Even Months | — |
| 5-Year Total Cost — Standard | — |
| 5-Year Total Cost — No-Cost | — |
A no-cost refinance trades a higher interest rate (0.25-0.5% above market) for $0 closing costs. The lender pays the closing costs via "lender credit" baked into the higher rate. The math favors no-cost only when you might move or refinance again within 24-48 months.
How the Math Works
Standard refi: lower rate, $5,000-10,000 closing costs out-of-pocket or rolled into loan. No-cost refi: 0.25-0.5% higher rate, $0 closing. Compute break-even = closing costs ÷ monthly payment difference. If you stay longer than break-even, standard wins. If shorter, no-cost wins.
Hidden Cost in Rolling Closing Into Loan
Many borrowers think "rolling closing into loan" is free. It is not — you pay interest on the rolled amount for the full loan term. A $7,500 closing rolled into a 30-year 6.5% loan adds $9,540 of interest over 30 years on TOP of the original $7,500 you would have paid in cash. No-cost (via higher rate) is actually simpler to reason about.
When No-Cost is the Right Choice
No-cost wins when: (1) you expect to sell or refi within 2-3 years, (2) you do not have cash for closing and refuse to roll it in, (3) the rate spread is small (0.125% or under), (4) you can invest the saved closing cash at higher return than the rate spread. The trick is honest assessment of your hold period — most people overestimate how long they will keep a mortgage.
Last updated May 2026. Sources: CFPB Mortgage Rules, Fannie Mae Selling Guide.