Refinance Calculator

Find out if refinancing makes sense and when you will break even.

Current balance ($)

Current rate (%)

New rate (%)

Years remaining

New loan term (years)

Closing costs ($)

Monthly impact

$348.60

estimated savings per month

Breakdown

12 months to break even

Rate change1.50 percentage points

Closing costs$4,000.00

Lifetime difference$10,647.91

Current monthly payment

$1,847.48

25 years remaining

New monthly payment

$1,498.88

30 year refinance

Monthly savings

$348.60

Lower payment

Break-even point

12 months

Closing costs recovered

How refinancing is calculated

A refinance replaces your current mortgage with a new loan. The calculator compares your current monthly payment against the new payment, then estimates how long it takes monthly savings to recover the closing costs.

A lower monthly payment can be useful, but it is not the whole story. Extending the loan term can reduce the payment while increasing the total amount paid over time.

Break-even formula

The break-even point shows how many months you need to keep the new loan before the upfront refinance costs are recovered by monthly savings.

Monthly savings = current monthly payment - new monthly payment
Break-even months = closing costs / monthly savings
Lifetime difference = old remaining payments - new payments - closing costs

Worked example: If refinancing saves $250 per month and costs $4,000 to close:

Break-even = $4,000 / $250
Break-even = 16 months
Stay longer than 16 months to begin seeing net savings

Current loan vs refinance

Measure	Current loan	New loan
Monthly payment	$1,847.48	$1,498.88
Total remaining payments	$554,243.38	$543,595.47
Interest rate	7.5%	6%
Loan term	25 years	30 years

When refinancing may make sense

Lower rate

A meaningful rate drop can reduce monthly payment and total interest, especially when closing costs are modest.

Shorter term

Moving from a 30-year to a 15-year loan may raise payment but can reduce total interest and speed up payoff.

Cash flow relief

A longer term can lower monthly payment, but compare lifetime cost before choosing it purely for payment relief.

Cash-out refinance

Borrowing against home equity can fund large expenses, but it increases debt and may reset your payoff timeline.

Costs to compare

Cost	Typical effect	Why it matters
Origination fees	Upfront cost	Raises break-even time
Appraisal and title	Closing cost	Often required for the new loan
Points	Rate tradeoff	Paying points can lower rate but increases upfront cost
Escrow and prepaid items	Cash needed	May affect cash to close even when not pure fees

Practical refinance tips

Compare APR, not only rate. APR includes more loan costs and can make offers easier to compare.
Know your stay horizon. If you may move before break-even, upfront costs can outweigh monthly savings.
Watch the term reset. Restarting a 30-year clock can lower payment while increasing total interest.
Ask about no-cost options. They may reduce upfront cash, but usually trade that for a higher rate or rolled-in costs.
Get multiple quotes. Small differences in rate and fees can change the break-even point meaningfully.

Formula / How it works

Refinancing compares your current mortgage with a new loan. Monthly savings = current payment - new payment Break-even = closing costs / monthly savings If you stay in the home longer than the break-even point, the refinance may make sense. Also compare total interest and loan term, not just monthly payment.