Refinance Calculator
Compare your current mortgage against a new rate to see your exact monthly savings, lifetime interest reduction, and break-even month after closing costs.
Calculate how much you can save by refinancing your home mortgage. Compare current vs new interest rates, monthly savings, and break-even timeline.
See also: Home Loan Calculator, Payment Calculator, How Mortgage Refinancing Actually Works (and When It Saves Money)
How it is calculated
Monthly Savings = Current Monthly Payment − New Monthly Payment; Break-even Months = Closing Costs ÷ Monthly Savings
Worked example: Refinancing a $300,000 Loan from 6.8% to 5.2%
$300,000 balance remaining over 25 years at 6.8% refinanced to a 25-year fixed loan at 5.2% with $4,000 closing costs.
- Calculate current monthly payment: $300,000 at 6.8% over 300 months = $2,083.47 per month.
- Calculate new monthly payment: $300,000 at 5.2% over 300 months = $1,789.26 per month.
- Calculate monthly savings: $2,083.47 - $1,789.26 = $294.21 saved each month.
- Calculate break-even period: $4,000 closing costs ÷ $294.21 monthly savings = 13.6 months.
- Calculate total interest saved over 25 years minus closing costs: $88,263 gross savings − $4,000 fees = $84,263 net savings.
Net savings of $84,263 over the life of the loan with closing costs recovered in month 14.
How to Use This Calculator (Step-by-Step)
- Enter your current remaining mortgage balance (exclude home equity).
- Input your current annual interest rate and remaining years on the loan.
- Specify the proposed new mortgage rate and the desired term (e.g., 15, 20, or 30 years).
- Add estimated closing costs, origination fees, and title insurance.
- Review the monthly reduction and verify that you plan to stay in the home past the break-even month.
Frequently asked questions
When is refinancing worth the closing costs?
Refinancing is typically worthwhile if you can lower your interest rate by at least 0.75% to 1.0% and you plan to remain in the property longer than the break-even period.
What is a break-even point in refinancing?
The break-even point is the number of months required for your accumulated monthly savings to equal the upfront closing fees paid to execute the new loan.
Can I shorten my loan term while refinancing?
Yes. Many borrowers refinance from a 30-year to a 15-year fixed loan. This typically offers even lower interest rates, building home equity much faster.
Does refinancing hurt your credit score?
Applying for a refinance triggers a hard credit inquiry that temporarily dips your score by a few points, but consistent on-time payments quickly restore it.
What happens if I move before the break-even month?
You lose money on the refinance. The break-even month is when accumulated monthly savings first equal the upfront closing costs, so moving before that point means the savings have not yet covered the fees.
Does refinancing change my loan balance?
The balance you enter carries over as the new loan amount, but rolling closing fees into the loan increases the principal, and you then pay interest on those fees as well. Compare the result with fees paid separately before deciding.