Refinance Calculator

Determine whether refinancing your mortgage makes financial sense. This calculator shows your break-even timeline, monthly payment savings, and total interest reduction so you can make a confident decision.

The refinance calculator compares your current mortgage terms against a new loan to determine whether switching makes financial sense. You enter your existing loan balance, current interest rate, and monthly payment, then specify the proposed new rate, loan term, and closing costs. The calculator runs both scenarios forward to produce a clear comparison. First, it calculates your new monthly payment based on the refinanced loan terms. The difference between your current and new payment represents your monthly savings. It then divides your total closing costs by this monthly savings to determine your break-even point, which is the number of months you need to stay in the home before refinancing pays for itself. Beyond the break-even analysis, the calculator projects total interest paid under both scenarios for the remaining life of each loan. This reveals your lifetime savings from refinancing, which often amounts to tens of thousands of dollars even when the rate reduction seems small. The tool also accounts for the fact that refinancing restarts your amortization clock, which can increase total interest if you extend your term. The results include a month-by-month comparison showing cumulative savings over time, making it easy to see when the new loan overtakes the old one in total value. This comprehensive view helps you weigh the upfront cost of closing against long-term benefits, ensuring you make a decision based on complete financial data rather than just the monthly payment difference.

The break-even point is the most critical number in any refinance decision. If you plan to move or sell before reaching break-even, refinancing will cost you more than it saves. Calculate this carefully before committing to closing costs.

Cash-out refinancing lets you tap equity, but it resets your amortization clock and increases your total interest cost. Compare the effective interest rate on the cash-out portion against alternative borrowing options like a HELOC before proceeding.

Rate-and-term refinancing to a shorter loan term can save tens of thousands in interest even if the rate reduction is modest. The combination of a lower rate and shorter term compounds the savings dramatically.

The break-even point is the number of months it takes for your monthly payment savings to recoup the closing costs of refinancing. For example, if closing costs are $6,000 and you save $200 per month, your break-even point is 30 months. You should plan to stay in the home beyond this point.

Refinancing typically costs 2-5% of the loan amount in closing costs, which includes appraisal fees, origination fees, title insurance, and other charges. On a $280,000 loan, expect to pay between $5,600 and $14,000. Some lenders offer no-closing-cost options with slightly higher rates.

Refinancing generally makes sense when you can reduce your interest rate by at least 0.5-1%, plan to stay in the home past the break-even point, and the total interest savings exceed closing costs. It can also make sense to shorten your loan term or switch from an adjustable to a fixed rate.

Yes, refinancing replaces your existing loan with a new one, restarting the amortization clock. If you refinance into a new 30-year term, you begin paying mostly interest again. Consider refinancing into a shorter term that matches your remaining payoff timeline to avoid extending your debt.

Yes, but you may need to pay private mortgage insurance on the new loan if your equity is below 20%. Some government-backed programs like FHA Streamline and VA IRRRL allow refinancing with minimal equity requirements. Your lender can advise on specific eligibility criteria.

This calculator provides estimates for informational purposes only. Results are based on the inputs you provide and standard financial formulas. Actual amounts may vary based on your specific situation, location, lender requirements, and market conditions. This is not financial, tax, or legal advice. Always consult with qualified professionals before making real estate or financial decisions.

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Monthly Savings

$233.99

New Monthly Payment$1,724.01
Break-Even Months26
Total Savings$78,237.06

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