Refinance Calculator

See if refinancing your mortgage makes sense. Free refinance calculator comparing your current and new monthly payments, closing costs, and break-even point.

A refinance calculator tells you whether replacing your current mortgage with a new one is worth it. The idea is simple: a new loan with a lower rate or shorter term can shrink your monthly payment, your total interest, or both. But refinancing is not free — closing costs typically run 2% to 6% of the loan amount — so the real question is how long it takes for the savings to pay back that upfront cost. That point is called the break-even month. Use this tool to compare your existing payment against the payment the new loan would produce. Enter your remaining loan balance, your current rate and remaining term, the new rate you are being offered, the new term, and your estimated closing costs. The calculator shows your monthly savings, the break-even point in months, the total interest saved over the life of the loan, and the net lifetime savings after closing costs. A lower rate usually wins on monthly payment, but a shorter term can raise your monthly payment while cutting total interest dramatically. Run a few scenarios: 30-year to 30-year at a lower rate, 30-year to 15-year to accelerate payoff, or a higher closing-cost estimate to stress-test the break-even. Everything runs in your browser, so you can experiment freely.

current-loan

new-loan

Result

154.27

Breakdown

New monthly payment
1,362.69
Break-even (months)
30
Total interest saved
55,537
Net lifetime savings (after closing costs)
50,937
Remaining interest on current loan
306,107
Total interest on new loan
250,570

About Refinance Calculator

What is refinance calculator?

A refinance calculator tells you whether replacing your current mortgage with a new one is worth it. The idea is simple: a new loan with a lower rate or shorter term can shrink your monthly payment, your total interest, or both. But refinancing is not free — closing costs typically run 2% to 6% of the loan amount — so the real question is how long it takes for the savings to pay back that upfront cost. That point is called the break-even month. Use this tool to compare your existing payment against the payment the new loan would produce. Enter your remaining loan balance, your current rate and remaining term, the new rate you are being offered, the new term, and your estimated closing costs. The calculator shows your monthly savings, the break-even point in months, the total interest saved over the life of the loan, and the net lifetime savings after closing costs. A lower rate usually wins on monthly payment, but a shorter term can raise your monthly payment while cutting total interest dramatically. Run a few scenarios: 30-year to 30-year at a lower rate, 30-year to 15-year to accelerate payoff, or a higher closing-cost estimate to stress-test the break-even. Everything runs in your browser, so you can experiment freely.

How to use this calculator

  1. Enter your current loan balance.
  2. Enter your current interest rate.
  3. Enter your remaining term.
  4. Enter your new interest rate.
  5. Enter your new loan term.
  6. Enter your closing costs.
  7. Click the "Calculate" button.
  8. View your result instantly — the main result is displayed prominently at the top with a detailed breakdown below it.

When to use this calculator

  • Deciding whether today's lower rates justify refinancing your current mortgage
  • Comparing a rate-and-term refinance against a 15-year payoff acceleration
  • Estimating how many months of savings it takes to recover closing costs
  • Weighing a cash-out refinance to consolidate higher-interest debt
  • Seeing how a new rate changes both monthly payment and lifetime interest

How the calculation works

Refinancing replaces one amortized loan with another, so the new monthly payment uses the same amortization formula as the original mortgage: M_new = P x [r(1+r)^n] / [(1+r)^n - 1], where P is your remaining loan balance, r is the new monthly rate (new annual rate / 12), and n is the number of payments (term in years x 12). The monthly saving is M_old - M_new. To find the break-even point, divide the upfront closing costs by that monthly saving. For example, a $240,000 balance refinanced from 6.5% to 5.5% over 30 years: r = 0.004583, n = 360, M_new = 240,000 x [0.004583 x (1.004583)^360] / [(1.004583)^360 - 1] ~= $1,363, against an old payment of about $1,517 — a saving of $154/month. If closing costs are $4,600, break-even is 4,600 / 154 ~= 30 months, so refinancing pays off if you stay past roughly 2.5 years. Total interest saved is the old remaining interest minus the new loan's total interest, and net lifetime savings subtracts closing costs from that.

Frequently Asked Questions

When does refinancing make sense?▼
Refinancing makes sense when the monthly savings pay back the closing costs before you sell or pay off the loan. A common rule of thumb is the 1% rule: if you can lower your rate by at least 1 percentage point and you plan to stay in the home past the break-even month, refinancing is usually worth it.
How is the refinance break-even point calculated?▼
Divide the upfront closing costs by the monthly savings. For example, if closing costs are $4,600 and refinancing lowers your payment by $154 a month, the break-even point is 4,600 / 154, or about 30 months. Refinancing pays off only if you stay in the home longer than that.
What are typical refinance closing costs?▼
Closing costs on a refinance usually run 2% to 6% of the loan amount and cover lender fees, appraisal, title search, title insurance, and recording fees. On a $240,000 loan, expect roughly $4,800 to $14,400 in closing costs.
What is the difference between rate-and-term and cash-out refinancing?▼
A rate-and-term refinance replaces your current loan with a new one for the same balance but a better rate or term. A cash-out refinance borrows more than you owe and gives you the difference in cash, trading equity for liquidity but usually raising the loan balance.
Is refinancing worth it for a 1% lower rate?▼
Often yes, if you stay past the break-even point. Dropping from 6.5% to 5.5% on a $240,000 30-year loan saves about $154 a month and roughly $55,000 in total interest. If closing costs are $4,600, you break even in about 30 months.
15-year vs 30-year refinance: which saves more?▼
A 15-year refinance raises the monthly payment but cuts total interest dramatically. On a $240,000 balance at 5.5%, the 30-year payment is about $1,363 and total interest about $250,000; the 15-year payment is about $1,961 but total interest is only about $113,000.
How much can I save by refinancing?▼
Savings depend on the rate drop, loan size, and term. A $240,000 balance refinanced from 6.5% to 5.5% over 30 years saves about $154 a month, $55,500 in total interest, and about $51,000 net of $4,600 in closing costs. Run your own numbers above for an exact estimate.
Does refinancing hurt your credit score?▼
Refinancing causes a small, temporary credit dip from the hard inquiry and the new loan replacing the old one. Shopping multiple lenders within a 14-to-45 day window counts as a single inquiry for rate shopping, so the impact is usually short-lived.

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