Mortgage Refinance Calculator
Compare your current mortgage with a new refinanced loan. See monthly savings, the breakeven month where savings exceed closing costs, and total interest saved over the remaining term.
Current Loan
New Loan
How This Calculator Works
The refinance calculator compares your current loan's remaining payments with a new loan at the specified rate and term. It calculates the total interest you would pay on each option and determines the breakeven point — the month where your cumulative savings from lower payments exceed the closing costs of refinancing.
A refinance typically makes financial sense when the breakeven point occurs well before you plan to sell or move. As a general rule, if you can recoup closing costs within 2-3 years and plan to stay in the home longer than that, refinancing is worth considering.
What to Consider Beyond the Numbers
While monthly savings are important, also consider: resetting your loan term (a new 30-year loan restarts the clock), whether you could invest the savings instead, your plans for staying in the home, and current closing cost estimates from multiple lenders. Shopping at least 3-4 lenders can save thousands in closing costs alone.
Frequently Asked Questions
When Does Refinancing Make Sense?
Mortgage refinancing replaces your existing loan with a new one, typically to secure a lower interest rate or change the loan term. A refinance makes financial sense when the monthly savings outweigh the closing costs within a reasonable timeframe — the break-even period.
General rule: refinancing is worth exploring if you can reduce your rate by at least 0.75–1.0%, you plan to stay past the break-even point, and your credit has improved since the original loan.
Refinance Break-Even Example
Current: $280,000 at 7.25%, 25 years remaining. Payment: $2,025. New: $280,000 at 6.0%, 30 years. Payment: $1,679. Closing costs: $7,500.
Monthly savings: $346. Break-even: 21.7 months. Over 10 years, total savings after costs: $34,020. To avoid extending the term, refinance to 15 or 20 years or make extra payments. Model payoff with our Mortgage Payoff Calculator.