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Mortgage Refinance Calculator
See if refinancing pays off. Enter your current loan and the new offer to estimate your monthly savings, break-even point, and lifetime interest savings.
Calculate Your Refinance Savings
Current monthly payment
New monthly payment
Monthly savings
Break-even point
Lifetime interest savings (after costs)
Estimates only. Actual offers depend on credit, appraisal, lender fees, and taxes/insurance which are not included.
How to Use This Refinance Calculator
- Enter your current loan details — the remaining balance, your current interest rate, and how many years are left.
- Enter the refinance offer — the new interest rate, the new term length, and estimated closing costs from the lender.
- Choose whether to roll costs in — paying closing costs out of pocket keeps the loan smaller but requires cash up front.
- Hit Calculate — compare the monthly savings against the break-even point to decide if refinancing makes sense.
- Check the lifetime number — a lower rate does not always mean lower total cost, especially if you extend the term.
The Refinance Formula
Monthly payment is computed with the standard amortization formula:
M = P × r(1+r)n ÷ ((1+r)n − 1)
Where P is the loan amount, r is the monthly interest rate (annual ÷ 12), and n is the number of monthly payments. Break-even is simply:
Break-even (months) = Closing costs ÷ Monthly savings
Worked Example
Say you owe $300,000 at 7.0% with 30 years left, and a lender offers 6.0% for 30 years with $5,000 in closing costs (paid out of pocket):
| Current loan | Refinanced loan | |
|---|---|---|
| Monthly payment | $1,995.91 | $1,798.65 |
| Monthly savings | — | $197.26 |
| Break-even | — | ~25 months (2.1 years) |
| Lifetime interest saved* | — | $66,012 |
*After subtracting the $5,000 closing costs. If you plan to sell or move before the break-even point, refinancing usually is not worth it.
When Refinancing Makes Sense
- Rates dropped at least 0.75–1% below your current rate — the classic rule of thumb.
- You will stay past break-even — the longer you stay, the more you save.
- Your credit improved — you may now qualify for a much better rate than when you bought.
- You want to drop PMI — if your home gained value, refinancing can remove private mortgage insurance.
- You want a shorter term — moving from 30 to 15 years builds equity dramatically faster.
Watch Out For
- Extending the term — refinancing 25 years remaining into a new 30-year loan restarts the clock and can cost more in total interest despite a lower payment.
- Closing costs vary — typically 2–5% of the loan; always get a Loan Estimate from at least 3 lenders.
- Cash-out refinancing — borrowing extra against equity raises the balance and the risk; this calculator assumes a rate-and-term refinance.
Frequently Asked Questions
Most advisors look for a break-even under 2–3 years. If you will sell or move before then, the closing costs usually wipe out the savings.
Rolling costs in means $0 out of pocket but a slightly larger loan and a bit more interest. Paying out of pocket gives a faster break-even. Use the checkbox above to compare both.
Typically 2–5% of the loan amount — so $6,000 to $15,000 on a $300,000 loan — covering appraisal, title, origination, and recording fees.
A hard inquiry may dip your score a few points temporarily. Multiple mortgage inquiries within a 14–45 day shopping window are generally treated as one.
Yes, and some lenders offer streamlined or reduced-fee refinances to existing customers — but always compare with outside offers.
Sometimes — on a large balance with low closing costs it can still pay off. Run the numbers above; the break-even tells the real story.
Disclaimer: This calculator provides estimates for educational purposes only and is not financial advice. Actual refinance terms depend on your credit profile, property appraisal, and lender. Consult a licensed mortgage professional before making decisions.