Mortgage Refinance Calculator
See whether refinancing actually saves you money. Enter your current loan and the new rate and term you are offered, and the calculator compares monthly payments, finds the break-even month where your interest savings cover the closing costs, and totals the lifetime difference.
A lower rate is not automatically a win — closing costs and a reset loan term can erase the benefit. The break-even point tells you how long you need to stay in the home for the refinance to pay off.
Monthly savings
$360.08
Break-even in 1y — after that the refinance pays off
- New monthly payment
- $1,703.37
- Current monthly payment
- $2,063.44
- Total interest (new loan)
- $313,212
- Total interest (current loan)
- $368,556
- Lifetime savings (after closing costs)
- $50,844
Calculation Formulas
Both your current and new payments use the standard amortization formula, where P is the balance, r is the monthly rate (APR ÷ 12), and n is the number of payments. The difference between them is your monthly saving.
Example:
A $300,000 balance at 7% over 30 years is about $1,996/mo; refinanced to 5.5% it is about $1,703/mo — roughly $293 saved each month.
How many months of savings it takes to recover the closing costs. Stay in the home past this point and the refinance comes out ahead.
Example:
$4,500 closing costs ÷ $293 monthly savings ≈ 16 months to break even.
Total interest left on your current loan minus total interest on the new loan. A longer new term can raise lifetime interest even when the monthly payment falls.
Key Figures
| Figure | Value | Description |
|---|---|---|
| Typical closing costs | 2%–6% of loan | Refinance closing costs commonly run 2% to 6% of the loan amount, covering origination, appraisal, title, and related fees. |
| Term reset | Restarts amortization | A new 30-year term restarts the clock; early payments are mostly interest again, which can offset a lower rate. |
Note: Results are estimates for planning purposes. Rates, fees, taxes, and insurance vary by lender and location — confirm exact figures with a licensed professional before making financial decisions.
Standards & Sources
Last verified: July 2026
- Break-even analysis
The Consumer Financial Protection Bureau recommends comparing closing costs against monthly savings to find the break-even point, and weighing how long you plan to stay in the home before refinancing.
- Total-cost comparison
Because resetting the loan term changes lifetime interest, sound guidance compares total interest paid — not just the interest rate — when deciding whether a refinance is worthwhile.
How to Use This Calculator
- Enter your current loan balance, interest rate, and the years remaining on it.
- Enter the new interest rate, the new loan term, and the closing costs to refinance.
- Read the new monthly payment next to your current one and the monthly savings.
- Check the break-even month — how long until the savings cover the closing costs — and the total interest difference over the life of the loan.
Frequently Asked Questions
How do I know if refinancing is worth it?
Compare your monthly savings to the closing costs. The break-even month — closing costs divided by monthly savings — tells you how long you must keep the loan to come out ahead. If you plan to stay in the home well past that point, refinancing generally makes sense.
What is the break-even point on a refinance?
It is the number of months it takes for your accumulated monthly savings to equal the closing costs you paid to refinance. Before break-even you are behind; after it, the refinance is saving you money. This calculator computes it from your payment reduction and closing costs.
Does a lower interest rate always save money?
Not necessarily. Closing costs can offset the savings, and resetting a loan back to a longer term can increase total interest even at a lower rate, because you are paying interest over more years. Check both the break-even month and the total interest difference before deciding.
Should I refinance to a shorter term?
Refinancing from a 30-year to a 15-year loan usually raises the monthly payment but sharply cuts total interest and builds equity faster. It can be a strong move if the higher payment fits your budget; use the term field here to compare the monthly payment and lifetime interest of each option.
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