Mortgage Refinance Calculator
See your new payment, monthly savings, and how long to recoup closing costs.
Your numbers
Monthly savings
- Current payment
- $2,120.34
- New payment
- $1,703.37
- Break-even on costs
- 15 months
- Lifetime interest change
- −$22,889.16
Refinancing swaps your current mortgage for a new one — usually to capture a lower rate, a shorter term, or both. It can save real money, but only if you stay in the home long enough to recoup the closing costs. That tipping point is the break-even, and it's the number that decides whether a refinance is smart or just expensive.
How a refinance works
A refinance pays off your existing loan with a new one at today's rate and a fresh term. A lower rate reduces your monthly payment and the interest you pay — but the new loan comes with closing costs, typically 2–5% of the balance.
The break-even point
The break-even is how long it takes your monthly savings to repay those closing costs:
Break-even months = closing costs ÷ monthly savings
If a refinance saves you $300/month and costs $6,000 to close, you break even in 20 months. Stay past that and you're ahead; sell or move sooner and you've lost money. The Refinance Calculator computes your new payment, the monthly savings, and this break-even automatically.
When refinancing is worth it
- The new rate is meaningfully lower than your current one.
- You'll stay in the home well past the break-even point.
- You're shortening the term and can afford the higher payment for far less total interest.
- You're switching from an adjustable rate to a fixed one for stability.
The term-reset trap
Here's the catch a lower payment can hide: if you're 8 years into a 30-year loan and refinance into a new 30-year loan, you've reset the clock. The monthly payment drops, but you may pay more total interest over the now-longer horizon — even at a lower rate. Always compare the lifetime interest, not just the monthly number. The calculator shows the interest difference so you can see whether you're truly saving or just stretching the loan.
How to get the best refinance
- Shop multiple lenders — rates and closing costs vary widely.
- Watch the costs — a "no-cost" refinance usually just rolls fees into a higher rate or balance.
- Consider a shorter term if you can afford it, to cut total interest rather than extend it.
- Check your credit first, since it drives the rate you'll be offered.
The bottom line
Refinancing is worth it when your monthly savings repay the closing costs well before you'd move — and when the lifetime interest actually falls. Run your current loan against the new rate and term in the Refinance Calculator, find your break-even, and let that number make the call. Rates and costs vary, so confirm quotes with lenders.
Frequently asked questions
How do I know if refinancing is worth it?
Compare your monthly savings to the closing costs. If the savings repay the costs well before you plan to move or sell — your break-even point — and the lifetime interest falls, refinancing is usually worth it.
What is a refinance break-even point?
It’s how long it takes the monthly savings to recoup your closing costs: closing costs ÷ monthly savings. If a refi saves $300/month and costs $6,000, you break even in 20 months.
How much does it cost to refinance?
Closing costs typically run 2–5% of the loan balance — covering appraisal, origination, title, and other fees. On a $300,000 loan that’s roughly $6,000–$15,000, which is what your monthly savings must repay.
Can a lower payment still cost me more?
Yes. If you refinance into a new 30-year loan partway through your current one, you reset the clock — the payment drops but you may pay more total interest over the longer term. Always compare lifetime interest, not just the monthly payment.
How much lower should the new rate be?
There’s no fixed threshold — even a 0.5–1% drop can be worth it on a large balance if you stay past the break-even point. What matters is the break-even and the lifetime interest, which depend on your balance, costs, and how long you’ll keep the home.
What is a "no-cost" refinance?
It’s a refinance with no upfront closing costs — but they’re not free. The lender rolls them into a higher interest rate or a larger loan balance, so you pay over time instead. Compare the true total cost against a standard refinance.
Should I refinance to a shorter term?
If you can afford the higher payment, a shorter term (e.g., 30 years to 15) cuts total interest dramatically — often the biggest long-term win. The calculator shows the interest difference so you can weigh it.
Does my credit score affect my refinance rate?
Significantly. A higher credit score earns a lower rate, which directly increases your monthly savings and shortens the break-even. Check and improve your credit before applying, and shop multiple lenders.