Refinance Calculator
Compare your current loan against a new refinance loan to see your new payment, monthly savings, and how many months it takes to break even on closing costs.
Example
Suppose you owe $250,000 at 7.5% with a current payment of $1,748.04/mo and 30 years left. You refinance to a new 30-year loan at 6% with $4,000 in closing costs (paid up front).
The new payment is $1,498.88/mo, saving $249.16/mo. Break-even = $4,000 ÷ $249.16 ≈ 17 months. After that point the refinance puts money back in your pocket each month.
How it works
Enter your current loan balance, rate and monthly payment, then the new rate, term and closing costs. The tool computes the new payment with the standard amortization formula and divides closing costs by your monthly savings to find the break-even point.
Good to know
This Refinance Calculator lets homeowners compare their existing mortgage against a proposed new loan in one view. You enter your current balance, rate, monthly principal-and-interest payment and years remaining, then the new rate, term and closing costs, and it returns the new monthly payment, your monthly savings, the break-even point in months, the new loan amount and an estimate of lifetime savings. It is built for anyone weighing whether a refinance offer is actually worth it, not just whether the rate looks lower.
Reach for it when a lender quotes you a new rate, when rates have dropped since you bought, or when you are deciding whether to shorten or lengthen your term. The toggle for rolling closing costs into the loan is useful for testing both scenarios: paying costs up front gives you a clear break-even month, while financing them makes the break-even immediate but raises the balance you owe interest on.
Read the results as a pair. Monthly savings tells you the short-term cash-flow effect, while break-even tells you how long you must keep the loan before those savings cover your closing costs. Lifetime savings compares total remaining payments, so it can turn negative even when your monthly payment drops, typically when a new 30-year term stretches the loan back out and adds years of interest. If lifetime savings is negative but monthly savings is positive, you are trading long-run cost for near-term breathing room.
One caveat worth keeping in mind: this tool compares only principal and interest. It excludes property taxes, homeowners insurance and PMI, so your real escrowed payment will be higher than the figure shown. To make the comparison fair, enter your current principal-and-interest amount rather than the full bill your servicer collects, and confirm the new payment and all fees with your lender before deciding.
Frequently asked questions
What is the break-even point in a refinance?
It is how many months it takes for your monthly savings to repay your out-of-pocket closing costs. If you pay $4,000 in costs and save $250 a month, you break even in about 16 months. Refinancing usually pays off only if you stay in the home past that point.
Should I roll closing costs into the loan?
Rolling costs into the loan means $0 up front, so this tool shows break-even as immediate, but you borrow more and pay interest on those costs over the life of the loan. Toggle the option to compare both ways and check the lifetime savings figure.
Is my data uploaded anywhere?
No — this calculator runs entirely in your browser; nothing is uploaded.
Is this financial advice?
No. These are educational estimates — consult a qualified financial professional before making decisions.
People also ask
How much does refinancing typically cost in closing fees?
Refinance closing costs commonly run a few thousand dollars and often fall in the range of about 2% to 6% of the loan amount, covering items like the appraisal, origination, title and recording fees. The exact total depends on your lender, location and loan size, so request an itemized loan estimate.
How much lower does the interest rate need to be to make refinancing worth it?
There is no universal threshold; what matters is whether your monthly savings recover your closing costs before you sell or move. A larger balance means even a small rate drop can save meaningfully, while a small balance may need a bigger drop to justify the fees.
Does refinancing reset my mortgage term?
Yes, a refinance replaces your old loan with a new one on its own term, so a new 30-year loan restarts the clock at 30 years. This can lower the monthly payment while increasing total interest paid over time, which is why comparing lifetime cost matters, not just the payment.
What is the difference between a rate-and-term refinance and a cash-out refinance?
A rate-and-term refinance changes your interest rate or loan length without increasing the balance, aside from any rolled-in costs. A cash-out refinance borrows more than you currently owe and gives you the difference in cash, raising your balance and usually your payment.
Will refinancing my mortgage affect my credit score?
Applying for a refinance triggers a hard inquiry and opens a new account, which can cause a small, temporary dip in your credit score. Multiple mortgage inquiries within a short shopping window are often treated as a single inquiry by scoring models.
Can I refinance if my home value has dropped or I have little equity?
It can be harder, because lenders look at your loan-to-value ratio and many conventional refinances expect a certain amount of equity. Some government-backed programs offer streamlined refinances with reduced requirements, but availability depends on your loan type and lender.
Does this calculator include property taxes, insurance, or PMI?
No, it compares only principal and interest, so it excludes escrow items like property taxes, homeowners insurance and private mortgage insurance. Your actual monthly bill will be higher than the payment figure shown here.
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