Refinance Calculator
See if refinancing your mortgage is worth it. Get your new monthly payment, break-even month, and total long-term savings — all in real numbers, not marketing estimates.
Your new payment drops by $362/month. Break-even at month 17.
Your Current Loan
New Refinanced Loan
Current Monthly Payment
$2,113
P&I only — excludes tax and insurance
New Monthly Payment
$1,751
Down $362/mo
Break-Even
1y 5m
When savings exceed closing costs
Interest Comparison
Refinancing saves $54,218 in interest vs. keeping the current loan. After the $6,000 in closing costs, net savings are $48,218.
When refinancing makes sense
- • You can cut at least 0.75% off your rate
- • You'll stay in the home past your break-even month
- • Your credit has improved since origination
- • You want to remove PMI (now at 20%+ equity)
- • You want to switch from an ARM to a fixed-rate loan
How to use this calculator
In the Current Loan section, enter your current loan balance, interest rate, and remaining years. You can find these on your most recent mortgage statement.
In the New Refinanced Loan section, enter the new rate you've been quoted, the new loan term, and the estimated closing costs. Refinance closing costs are typically 2-4% of the loan; your lender's Loan Estimate will give you the exact number.
The verdict banner at the top shows whether the refinance saves you money long-term. The break-even month tells you how long it takes for the monthly savings to add up to your closing costs. If you'll stay in the home past that month, the refinance wins.
How it works
Refinancing means taking out a new mortgage to pay off your current one — usually to get a lower interest rate, a shorter term, or pull cash out of your equity. You pay closing costs on the new loan (2-4% of the balance), and in return your monthly payment changes.
The break-even math is simple: divide your closing costs by your monthly savings, and that's how many months until the refinance pays for itself. If you'll stay in the home longer than that, you come out ahead. If you're likely to sell or refinance again before then, you'll lose money on the transaction.
Lowering your rate is only half the story. If you refinance a 30-year loan that has 25 years left into a new 30-year loan, you've reset the clock — you're back to paying mostly interest on a bigger loan for longer. The monthly payment will be lower, but your total interest paid over the life of the loan can actually go up. To avoid this trap, pick a new term that matches or shortens your current remaining term — if you have 25 years left, refinance to a 25- or 20-year loan, not back to 30.
The 0.75% rule of thumb: traditional wisdom says refinance when you can cut at least 0.75% off your rate. With closing costs typically $4,000-$8,000, that threshold is high enough to make the math work on a typical-size loan within a reasonable break-even timeline. Below 0.75%, the savings are usually too small to overcome the closing costs before you move.