Mortgages

Mortgage Refinance Calculator

Refinancing is worth it when the savings outlast the costs. Compare your current loan against a new rate and term to see the monthly saving, how many months until closing costs pay for themselves, and — the part most calculators hide — whether the deal wins over the full life of the loan.

Tested against worked examplesHow we verify

Current loan balance

Current interest rate

Years remaining

New interest rate

New loan term

Closing costs

Typically 2–5% of the loan amount.

Roll costs into the loan?

Monthly payment savings

$334.86

Current payment: $2,253.42
New payment: $1,918.56
Break-even on closing costs: 1 year 6 months
Lifetime savings (incl. costs): $33,425
Total interest on new loan: $370,683
Remaining interest if you keep the loan: $410,109

Compare scenariosTry three values of one input

Vary

Mortgage Refinance Calculator results for three values of Current loan balance
Current loan balance
Monthly payment savings	$303.46	$334.86+$31.40	$366.25+$62.79
Current payment	$2,042.16	$2,253.42+$211.26	$2,464.68+$422.52
New payment	$1,738.70	$1,918.56+$179.86	$2,098.43+$359.73
Break-even on closing costs	1 year 8 months	1 year 6 months−2 months	1 year 5 months−3 months
Lifetime savings (incl. costs)	$29,734	$33,425+$3,692	$37,124+$7,390
Total interest on new loan	$335,929	$370,683+$34,755	$405,432+$69,503

Every other input stays at the value you set above — currently $320,000 for current loan balance. Differences are measured against the first column.

Saved scenariosSave this calculation

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How this calculator works

Both loans are amortized in exact cents. The current payment is recomputed from your balance, rate, and remaining term (close to your actual payment if the loan was never recast). Break-even divides upfront closing costs by monthly savings.

Lifetime comparison totals every payment on each path — the remaining life of the current loan versus the full new loan plus upfront costs — so term-reset effects are visible instead of hidden. Taxes and PMI changes are out of scope.

What this assumes

Closing costs are paid up front rather than rolled into the balance. Rolling them in means borrowing them at your mortgage rate for the full term.
You hold the new loan to the end of the term shown. Most borrowers do not.
No prepayment penalty on the existing loan — rare, but not extinct.

What changes this number

New term length: The trap. Resetting to a fresh 30 years can lower the payment while raising total interest above doing nothing at all.
Closing costs: Set the break-even month. A 'no-cost' refinance does not remove them; it prices them into a higher rate.
How long you stay: Decides everything. Past break-even the refinance saves; before it, the fees are simply spent.

A worked example

Take the rate drop, same remaining term scenario. These figures are produced by the calculator above, not written alongside it, so they always match what the tool returns.

What you enter

New loan term: 27 years

What it returns

Monthly payment savings: $256.67
Current payment: $2,253.42
New payment: $1,996.75
Break-even on closing costs: 2 years
Lifetime savings (incl. costs): $77,159

Try an example

Rate drop, same remaining term Payment relief: reset to 30 years Aggressive: refi into a 15-year

Frequently asked questions

When is refinancing worth it?

The classic screen: the new rate is at least 0.75–1 point lower, you'll stay past the break-even month (closing costs ÷ monthly savings), and the lifetime math is positive. All three show up in this calculator — the third one is where longer terms quietly fail.

What is the break-even point?

The month when accumulated payment savings equal what you paid to refinance. $6,000 of costs at $250/month of savings breaks even in 24 months. Sell or refinance again before that and the deal lost money regardless of the lower rate.

Why can a lower payment still cost more overall?

Because a refinance usually resets the clock. Trading 27 remaining years at 7.25% for a fresh 30 years at 6% means paying interest for three extra years — often tens of thousands more despite the smaller payment. Matching the new term to your remaining years avoids the trap.

Should I roll closing costs into the loan?

Financing costs preserves cash but you pay interest on them for the life of the loan, and your break-even becomes murkier since nothing was paid upfront. If you have the cash and will stay put, paying upfront is usually cheaper.

What closing costs should I expect?

Typically 2–5% of the loan: origination and underwriting fees, appraisal, title insurance, and recording. 'No-closing-cost' refinances bury the costs in a higher rate — run that offer here as a higher new rate with $0 costs to compare honestly.

How much can refinancing save per month?

On our default scenario the payment falls from $2,253.42 to $1,918.56 — a saving of $334.86 a month, breaking even on closing costs after 1 year 6 months and saving $33,425 over the life of the loan. Enter your own loan, and run it at a matched term as well as a fresh 30 years.

This calculator helps answer

Should I refinance my mortgage?

The break-even test everyone teaches can approve a refinance that costs you more than doing nothing. Here is the comparison that actually decides it.