Refinance Calculator

Compare your current mortgage against a refinance. Calculate monthly savings, break-even point, and lifetime interest difference to decide if refinancing makes sense.

Current Loan
Your existing mortgage details.

25.0 years remaining

New Loan
Your refinance terms.

Typically 2–5% of loan amount.

✅ Refinancing Makes Sense
$342/mo

monthly savings after refinancing

Current Payment$2,365/mo
New Payment$2,023/mo
Break-Even Point
Months to recoup closing costs
1.5 years

You'll start saving after month 18.

Lifetime Interest
Current remaining interest
$389,432
New loan total interest
$408,142
Net savings (after closing costs)
-$24,711
When Does Refinancing Make Sense?

The 1% rule: Refinancing is generally worth it if you can lower your rate by at least 1 percentage point.

Break-even horizon: If you plan to stay in the home longer than the break-even period, refinancing saves money.

Watch out for term resets: Refinancing a 25-year remaining loan into a new 30-year loan lowers your payment but increases total interest paid.

Cash-out refinance: If you need funds for renovations or debt consolidation, a cash-out refi may make sense even at a higher rate.

How to Use This Calculator

Enter your current loan details (balance, rate, months remaining) and the proposed refinance terms (new rate, new term, closing costs). The calculator shows you monthly savings, break-even timeline, and lifetime interest difference.

  1. 1
    Enter Your Current Loan — Your remaining loan balance, current interest rate, and remaining months (e.g., 300 months left on a 30-year).
  2. 2
    Enter the Refinance Offer — The new interest rate, new loan term (typically 15 or 30 years), and the total closing costs quoted by the lender.
  3. 3
    Check Monthly Savings — The difference between your current monthly P&I and the new payment. Positive savings means cash flow improvement.
  4. 4
    Check the Break-Even Point — Divide closing costs by monthly savings. If break-even is less than your planned stay, refinancing makes sense.

📊 Example: Refinancing from 7.5% to 6.5%

You have $320,000 remaining on your current mortgage at 7.5% with 25 years (300 months) left. You're offered a refinance at 6.5% on a new 30-year term with $6,000 in closing costs. Here's the analysis:

Current Monthly Payment (P&I)$2,364/mo
New Monthly Payment (P&I)$2,022/mo
Monthly Savings$342/mo
Closing Costs$6,000
Break-Even Point18 months
Lifetime Interest Savings (after costs)+$76,500

If you plan to stay in your home for 18+ months, this refinance makes financial sense. The $342/month savings covers the $6,000 closing cost within a year and a half, and you save over $76K in total interest over the remaining loan life.

Understanding Your Results

Refinancing is a trade-off between upfront costs and long-term savings. Understanding these metrics is critical:

Monthly SavingsThe difference between your current monthly P&I payment and the new one. This is your immediate cash flow improvement. A $342/mo savings adds up to $4,104/year — but don't forget closing costs.
Break-Even PointThe number of months needed for cumulative monthly savings to equal the closing costs paid. If closing costs are $6,000 and you save $342/mo, break-even is 18 months. If you move before 18 months, you lose money on the refinance.
Lifetime Interest SavingsThe total interest you save over the full loan term. However, this number can be misleading if you restart a 30-year term — you're extending your years of payments. The calculator shows this figure both ways.
Resetting the ClockIf you're 5 years into a 30-year mortgage (300 months remaining) and refinance to a new 30-year, you're adding 60 months of payments. The monthly savings may come partly from stretching payments over a longer period. Always compare with a shorter new term if possible.

Common Mistakes to Avoid

Homeowners frequently make costly mistakes when evaluating refinance offers. Watch for these:

❌ Focusing only on monthly savings without considering the extended term.

✅ Refinancing from a 300-month remaining to a new 360-month loan saves $342/mo, but adds 60 months of payments. Without the term extension, the "savings" partly come from stretching out your payments, not just a lower rate.

❌ Ignoring closing costs and only looking at the rate difference.

✅ A great rate is worthless if closing costs are $10K+ and you plan to move in 2 years. Always calculate the break-even point. If break-even exceeds how long you'll keep the home, don't refinance regardless of the rate.

❌ Refinancing too many times in a short period.

✅ Each refinance has hard costs (appraisal, title, origination) and soft costs (hard credit inquiry, time investment, paperwork). Frequent refinancing can cost thousands in cumulative fees. Wait until you can lower your rate by at least 0.75-1% before refinancing.

Related Tools & Guides

Learn more about refinancing strategies and alternatives:

Mortgage Calculator →Extra Payment Calculator →When Should You Refinance? →30-Year vs 15-Year Mortgage →

Frequently Asked Questions

When does refinancing make sense?
Refinancing typically makes sense when you can lower your rate by at least 0.5-1% and plan to stay in the home long enough to recoup closing costs through monthly savings — usually 2-3 years.
What is the break-even point?
The break-even point is when your cumulative monthly savings equal the closing costs paid to refinance. If it costs $5,000 to refinance and you save $200/month, your break-even is 25 months.
Should I refinance to a shorter term?
Refinancing from a 30-year to a 15-year loan usually comes with a lower rate but significantly higher monthly payment. This can save hundreds of thousands in interest over the life of the loan if you can afford the payments.
What closing costs should I expect for a refinance?
Refinance closing costs typically range from 2% to 5% of the loan amount and include application fees, appraisal, title search, origination fees, and prepaid interest. Our calculator lets you adjust this to your specific quote.