FinanceCalcs
Refinance Calculator
Compare your current mortgage to a new loan, calculate your monthly savings, and find the exact break-even point where refinancing starts paying off — with a full month-by-month savings chart.
Works for any fixed-rate mortgage refinance — accounts for closing costs to show true net savings over time.
Refinance Calculator
Monthly Savings: $0
- Current Loan Balance
- New Loan Balance
"The goal of refinancing is not just a lower payment — it's a lower total cost."
— Unknown
When does refinancing make sense?
Refinancing replaces your current mortgage with a new loan — ideally at a lower interest rate, a shorter term, or both. Whether it is worth doing depends on three factors: how much you save each month, what the closing costs are, and how long you plan to stay in the home.
The break-even point is the number of months it takes for your cumulative monthly savings to exceed your upfront closing costs. If you plan to stay longer than the break-even period, refinancing makes financial sense. If you plan to move beforehand, you will pay more in closing costs than you recover in savings.
A common rule of thumb is that refinancing is worth exploring if you can reduce your rate by at least 0.75–1 percentage point. But the exact math always depends on your current balance, the closing costs quoted by your lender, and your specific timeline — which is exactly what this calculator is built to show you.
lightbulb Example Refinance Scenario
Suppose you have a $320,000 remaining balance on a 30-year mortgage at 7.5% APR with 22 years remaining. You are offered a refinance at 6.5% APR with $6,400 in closing costs.
Your current monthly P&I payment is approximately $2,377. The new payment would drop to about $2,147 — a monthly savings of $230. At that rate, your break-even point is roughly 28 months.
If you plan to stay in the home for 5+ more years, you would save over $7,800 in net interest after accounting for closing costs — and the new loan would also reduce your total remaining interest by tens of thousands of dollars.
Many homeowners use a refinance calculator when rates drop, when their credit score improves significantly, or when they want to shorten their loan term without relying on intuition alone.
Refinance Calculator FAQs
How much does a refinance typically cost?
Closing costs for a refinance typically run 2–5% of the loan amount. On a $300,000 loan, that is $6,000–$15,000. Costs include origination fees, appraisal, title insurance, and prepaid items. Some lenders offer no-closing-cost refinances by rolling fees into the loan balance or offsetting them with a slightly higher rate — which reduces upfront cost but increases the long-term expense.
What is the break-even point and why does it matter?
The break-even point is the number of months it takes for your cumulative monthly savings to equal your closing costs. It is the most important number in any refinance decision — if you plan to sell or move before reaching break-even, the refinance will cost you money. If you stay past break-even, every additional month adds to your net savings.
Should I refinance into a shorter loan term?
Refinancing from a 30-year to a 15-year mortgage typically offers a lower rate and dramatically reduces total interest paid — often by hundreds of thousands of dollars. The trade-off is a higher monthly payment. If the higher payment fits your budget comfortably and you are committed to staying in the home, a shorter-term refinance often produces the best financial outcome.
Does refinancing restart the amortization clock?
Yes — a new loan starts a fresh amortization schedule, which means early payments are again weighted heavily toward interest. If you are already well into your loan and refinance into another 30-year term, you may lower your payment but extend the total payoff date and pay more in lifetime interest than staying on your current loan. The calculator's side-by-side comparison makes this trade-off visible.
Refinance terminology
Break-Even Point
The number of months it takes for cumulative monthly savings to equal the upfront closing costs. After this point, every additional month in the home adds net savings from the refinance.
Closing Costs
Fees paid to complete the refinance — typically 2–5% of the loan amount. Includes origination fees, appraisal, title insurance, and prepaid items such as property taxes and homeowner's insurance.
Rate-and-Term Refinance
Refinancing to change the interest rate, loan term, or both — without taking cash out. The goal is to reduce monthly payments, reduce total interest paid, or both.
Cash-Out Refinance
Borrowing more than your current balance and taking the difference as cash. The new loan is larger, which increases monthly payments but provides access to home equity for renovations, debt consolidation, or other purposes.
No-Closing-Cost Refinance
Closing costs are rolled into the loan balance or offset by accepting a slightly higher interest rate. There are no upfront fees, but you pay more over the life of the loan compared to paying closing costs out of pocket.
Disclaimer: All calculators on this site are provided for informational and educational purposes only. Results are estimates based on the inputs you provide and mathematical formulas — they do not account for taxes, fees, inflation, risk, or other real-world factors that may affect financial outcomes. Past performance does not guarantee future results. Nothing on this site constitutes financial, investment, legal, or tax advice. Always consult a qualified professional before making financial decisions.
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