The Choices
Which answer is correct?
Break-even is upfront cost divided by monthly savings.
- A 10 months
- B 18 months
- C 25 months
- D 42 months
Answer: C · 25 months
$4,500 divided by $180 equals 25 months. If you sell or refinance again before then, the deal probably loses money.
The money lesson
The break-even is about 25 months: $4,500 in closing costs divided by $180 per month in savings.
This puzzle is designed to make one financial rule easier to remember. Use it as a starting point, then run your own numbers before making a real-world decision.