Mortgage Refinance Calculator
Compare your current mortgage to a new refinanced loan. See your monthly savings, total interest saved over the life of the loan, and exactly when you'll break even on closing costs.
How to Use This Calculator
- Enter your current loan balance (not original loan amount).
- Input your current interest rate and remaining loan term.
- Enter the new interest rate you've been quoted.
- Select the new loan term (e.g., 30-year, 20-year, or 15-year).
- Add estimated closing costs for the refinance.
- Review your break-even timeline, monthly savings, and total interest comparison.
How Break-Even Is Calculated
The break-even analysis determines when your refinance pays for itself:
Break-even (months) = Total closing costs ÷ Monthly payment savingsThe total savings comparison also accounts for the difference in total interest paid over the remaining life of your current loan vs. the new loan term:
Net savings = (Total remaining interest on current loan) − (Total interest on new loan + closing costs)Example Scenarios
Rate Drop — 7.25% to 6.25%
Balance: $320,000 · 27 years remaining · Closing costs: $6,500
Current payment: $2,183 · New payment: $1,971 · Monthly savings: $212
Break-even: 31 months · Lifetime savings: ~$69,800
Term Reduction — 30-year to 15-year
Balance: $250,000 · Current rate: 7.0% · New rate: 5.75% (15-yr) · Costs: $5,000
Current payment: $1,663 · New payment: $2,076 · Payment increase: $413
Total interest saved: ~$148,000 · Paid off 12 years sooner
Small Rate Drop — 6.75% to 6.25%
Balance: $280,000 · 25 years remaining · Closing costs: $5,800
Current payment: $1,945 · New payment: $1,849 · Monthly savings: $96
Break-even: 60 months · Only worth it if staying 5+ years
Tips for a Smart Refinance
- Target at least a 0.5–0.75% rate reduction to justify closing costs.
- Only refinance if you plan to stay past the break-even point.
- Shop multiple lenders — rate quotes can vary significantly.
- Consider a "no-closing-cost" refi if you might move within 3–5 years.
- Avoid extending your term unless monthly cash flow is critical.
- Check if your current lender offers a streamline refinance with reduced fees.
Frequently Asked Questions
When does refinancing make sense?
Refinancing makes sense when you can lower your rate by at least 0.5–0.75%, plan to stay past the break-even point, need to switch from ARM to fixed, or want to shorten your term to save on total interest.
What is the break-even point?
The break-even point is when cumulative monthly savings equal your closing costs. Divide total costs by monthly savings. $6,000 in costs with $200/month savings = 30 months to break even.
How much does it cost to refinance?
Expect 2–5% of the loan amount in closing costs ($6,000–$15,000 on a $300,000 loan). Costs include appraisal, title insurance, origination fees, and recording fees.
Should I refinance to a shorter term?
If you can afford higher payments, shortening your term saves substantial interest. Going from 30 to 15 years on $300,000 at 6% saves over $200,000 in interest.
Does refinancing restart my loan term?
Yes. A new 30-year refinance resets the clock. If you're 10 years in, consider a 20-year term to avoid paying interest for 40 total years.