Mortgage refinance calculator
Refinance Calculator
Estimate whether refinancing a mortgage could lower your payment, how long it may take to recover closing costs, and whether the new loan may save or cost more over time. This calculator compares your current remaining mortgage with a possible new refinance loan.
Refinance estimate summary
A refinance can look attractive when the new payment is lower, but payment alone is not the full decision. Closing costs, the new term length, how long you plan to keep the loan, and total interest over time can change the answer.
| Current estimated payment | $2,120.34 |
|---|---|
| New estimated payment | $1,750.72 |
| Estimated monthly savings | $369.62 |
| Estimated closing costs | $5,000.00 |
| Break-even point | 13.5 months (1.1 years) |
| Interest rate difference | 1.25 percentage points |
| Term change | 5 years longer |
Result note: This scenario shows monthly savings and a relatively shorter break-even period, but total lifetime cost still depends on the new term.
Current loan vs refinance loan
| Scenario | Rate | Term | Monthly payment | Total remaining payments |
|---|---|---|---|---|
| Current loan | 7.00% | 25 years remaining | $2,120.34 | $636,101.28 |
| New refinance loan | 5.75% | 30 years | $1,750.72 | $635,258.68 |
In this estimate, the current loan has about $336,101.28 of remaining interest, while the refinance scenario has about $335,258.68 of estimated interest plus closing costs.
How this refinance calculator works
The calculator estimates a payment for the remaining balance on your current loan and compares it with a new payment using the refinance rate and term. It then estimates monthly savings, the break-even period, and the difference in total remaining payments.
What is a refinance break-even point?
The break-even point is the estimated time needed for monthly savings to recover refinance closing costs. For example, if closing costs are $5,000 and the refinance saves $200 per month, the simple break-even point is about 25 months.
When can refinancing make sense?
Refinancing may make sense when the new rate is meaningfully lower, the monthly savings are useful, the break-even period is shorter than the time you expect to keep the loan, or the new term supports your budget goals. It may be less helpful if the loan term is extended so much that total interest rises.
Why a lower payment can still cost more
A 30-year refinance may reduce the monthly payment by spreading the balance over a longer period. That can improve monthly cash flow, but it can also increase the total amount paid if the loan lasts much longer.
Closing costs matter
Refinance closing costs may include lender fees, appraisal fees, title fees, recording fees and other charges. Higher closing costs increase the break-even point and reduce the benefit of refinancing.
Important limitations
This calculator provides simplified educational estimates only. It does not include taxes, insurance changes, PMI changes, escrow changes, cash-out refinancing, prepayment penalties, lender-specific fees or tax effects. It is not mortgage, lending, financial, legal or tax advice.
Refinance calculator FAQ
Is refinancing always worth it when the rate is lower?
No. A lower rate can help, but closing costs, the new term and how long you keep the loan matter. A refinance with a lower monthly payment can still cost more over the life of the loan if the repayment period is extended too much.
Should I compare APR or interest rate?
The interest rate affects the monthly payment, while APR is intended to reflect a broader borrowing cost that may include certain fees. When comparing offers, review both the payment and the full cost of the loan.
What is a good break-even period?
A shorter break-even period is generally easier to justify, but there is no single correct number. The key question is whether you expect to keep the mortgage long enough to recover the refinance costs.
Does this calculator include taxes and insurance?
No. This calculator focuses on principal and interest for the loan comparison. Your actual monthly mortgage payment may also include property taxes, homeowners insurance, PMI, HOA fees or escrow adjustments.