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Refinance Calculator

Compare your current mortgage to a new rate and term, find out exactly when your closing costs break even, and see your total lifetime savings.

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years
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years
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Origination, appraisal, title, and other lender fees.

Monthly saving$336.05
Current monthly payment$2,306.35
New monthly payment$1,970.30
New loan amount$320,000.00
Break-even point18 months
Lifetime saving$102,880.20

How this calculator works

Refinancing replaces your existing mortgage with a new one — ideally at a lower rate, a shorter term, or both. This calculator computes your current loan's monthly payment and a new loan's monthly payment using the same amortizing-loan formula behind every mortgage payment:

M = P × r × (1+r)n ÷ ((1+r)n − 1)

It then finds your break-even point — the number of months your monthly savings take to cover your closing costs — using closing costs ÷ monthly saving, and your lifetime saving by projecting that monthly saving across the shorter of your two remaining terms, minus the upfront closing costs. If you choose a cash-out refinance, the new loan amount increases by your requested cash-out amount above your current balance, which raises the new payment and reduces (or reverses) your monthly savings.

Worked example

Say you have a $320,000 balance remaining, 27 years left on your original loan at 7.5%, and you refinance into a new 30-year loan at 6.25%with $6,000 in closing costs. Your current payment is $2,306.35/month; the new loan's payment is $1,970.30/month — a saving of $336.05/month. Dividing $6,000 by $336.05 gives a break-even point of 18 months: after a year and a half, every further month in the home is pure savings, adding up to roughly $102,880 over the comparison term after accounting for the closing costs. If you instead took a $25,000 cash-out on the same terms, your new loan grows to $345,000, your payment rises to $2,124.22, your monthly saving shrinks to $182.13, your break-even stretches to 33 months, and you'd receive $19,000 in cash at closing after the $6,000 in costs are deducted.

What affects your result

  • Rate gap — the bigger the drop between your current and new rate, the faster your break-even and the larger your lifetime savings.
  • Remaining vs new term — resetting to a fresh 30-year term lowers your monthly payment but can increase total interest paid unless you also shorten the term.
  • Closing costs — higher upfront fees push your break-even point further out; always compare lender estimates, since they vary.
  • Cash-out amount — every dollar you take out increases your new loan balance and monthly payment, directly reducing your net savings.
  • How long you plan to stay — if you'll move before your break-even point, refinancing purely for savings usually doesn't make sense.

A note on accuracy

This calculator computes on full, unrounded figures and rounds only for display. It does not include PMI changes, escrow account adjustments, or potential tax implications of a cash-out refinance, which can be significant — consult a tax professional for cash-out scenarios. For general refinance guidance, see theConsumer Financial Protection Bureau's refinancing guide.

Frequently asked questions

Is it worth refinancing my mortgage?

Refinancing is generally worth it when your break-even point — the time it takes for your monthly savings to cover your closing costs — is shorter than how long you plan to stay in the home. As a rule of thumb, if you'll recoup your closing costs within 2-3 years and plan to stay longer than that, refinancing usually pays off. This calculator computes your exact break-even month so you don't have to guess.

How much can I save by refinancing?

It depends on the gap between your current rate and the new rate, your remaining balance, and your closing costs. As an example, dropping from 7.5% to 6.25% on a $320,000 balance can save over $300 a month and, after accounting for closing costs, well over $100,000 in total interest across a new 30-year term — see the worked example above and try your own numbers in the calculator.

What is the refinance break-even point?

Your break-even point is the number of months it takes for your accumulated monthly savings to equal your closing costs — after that point, every month you stay in the home is pure savings. It's calculated as closing costs ÷ monthly saving. If your new rate doesn't actually lower your payment, there is no break-even point, and refinancing only makes sense for other reasons like shortening your term or cashing out equity.

What is a cash-out refinance?

A cash-out refinance replaces your current mortgage with a larger one and gives you the difference in cash at closing, using your home's equity as the source of funds. It typically comes with a higher new loan balance and monthly payment than a standard rate-and-term refinance, so check the 'Cash-out refinance' box above to see how a specific cash-out amount affects your new payment and the cash delivered at closing (after your closing costs are deducted).

Does refinancing reset my loan term?

Yes, by default — a new 30-year refinance restarts your amortization clock, even if you were partway through your original loan. That's why total lifetime interest can sometimes go up even when your monthly payment goes down, if you don't also shorten your new term. Try entering the same number of years you have left on your current loan as the new term to compare like-for-like.

What closing costs should I expect on a refinance?

Refinance closing costs typically run 2-5% of the loan amount, covering origination fees, appraisal, title insurance, and recording fees — similar to a purchase, but usually without some fees like a real estate agent commission. This calculator asks for your total closing costs directly so you can plug in a lender quote once you have one.

Related calculators

Mortgage CalculatorEstimate your full new monthly payment including taxes and insurance.Closing Cost EstimatorGet a detailed breakdown of the fees due at closing.Mortgage Payoff CalculatorSee how extra payments could shorten your new loan further.