Mortgage Refinance Calculator
Compare your current loan to a new one and see your new payment, lifetime interest saved, and the exact break-even month — with an instant verdict on whether refinancing is worth it, not just a number.
Calculator
Your current mortgage
The new (refinanced) loan
What this refinance calculator tells you
Refinancing means replacing your existing mortgage with a brand-new loan — ideally at a lower interest rate, a shorter term, or both. Most online tools just spit out a new monthly payment. That number alone is misleading, because a lower payment achieved by stretching a 27-year loan back out to 30 years can actually cost you tens of thousands of dollars in extra interest. This calculator gives you the three numbers that actually decide whether refinancing is smart: your new monthly payment, the break-even point (how many months until your monthly savings repay the closing costs), and the net lifetime interest saved after those fees. Then it delivers a plain-English verdict so you do not have to interpret the math yourself.
How to use it
- Current balance owed — the payoff amount on your existing mortgage today, not the original loan size.
- Current rate and years left — your present interest rate and how many years remain on the loan.
- New rate and term — the rate a lender is quoting you and the length of the new loan (commonly 15, 20, or 30 years).
- Closing costs — lender fees, appraisal, title, and points. In the US these typically run 2–5% of the loan amount.
The result updates instantly. Read the verdict first, then check the break-even month against how long you actually plan to stay in the home.
The break-even rule (the part most people miss)
The break-even point is the single most important number in any refinance decision. It is simply:
If your refinance costs $5,000 in fees and lowers your payment by $250 a month, you break even in 20 months. Stay in the home longer than that and every month afterward is pure savings. Sell or refinance again before month 20 and you lost money. This is why the "should I refinance?" question is really "how long will I keep this loan?"
Worked examples
| Scenario | Old payment | New payment | Break-even |
|---|---|---|---|
| $300k, 7% → 6% (30y), $5k fees | $1,996 | $1,739 | ~20 mo |
| $250k, 6.5% → 5.5% (same term), $4k fees | $1,580 | $1,420 | ~25 mo |
| $400k, 6% → 5.5% (30y), $8k fees | $2,398 | $2,271 | ~63 mo |
Notice the third row: a half-point drop on a large loan with high fees pushes break-even past five years — borderline at best. The size of the rate gap and the fees matter far more than the headline payment.
How much does a rate drop save? (per $100k borrowed, 30-year)
| Rate drop | Monthly saving / $100k | Years to break even ($3k fees) |
|---|---|---|
| 0.5% | ~$32 | ~7.8 |
| 1.0% | ~$64 | ~3.9 |
| 1.5% | ~$96 | ~2.6 |
| 2.0% | ~$128 | ~2.0 |
A common rule of thumb says refinance when you can cut your rate by at least 0.75–1%. As the table shows, anything under half a point rarely clears the fees within a reasonable time.
When refinancing makes sense — and when it does not
- Good reasons: rates have fallen 0.75%+, you will stay past break-even, you want to drop PMI now that you have 20% equity, or you are shortening the term to pay off faster.
- Cash-out: tapping equity for a renovation can be worth a slightly higher rate — but the calculator's payment verdict will flag it as "not worth it on payment alone," which is expected for cash-out.
- Poor reasons: chasing a lower payment by resetting to a new 30-year term when you are 8 years into your current loan. You restart the interest clock and usually pay more overall.
- You are moving soon: if you might sell within a couple of years, fees almost never pay off.
Tips to get the most out of a refinance
- Shop at least three lenders the same week — rate quotes vary widely and inquiries within a short window count as one credit pull.
- Ask for a no-closing-cost option and compare: it rolls fees into a slightly higher rate, which can win if you might move sooner.
- Keep the term equal to or shorter than what you have left; a 30-year reset is where most "savings" quietly disappear.
- Watch points — paying points only pays off if you keep the loan long enough, the same break-even logic as fees.
Frequently asked questions
Is refinancing worth it for a 1% rate drop?
Often yes, if you plan to stay in the home. A 1% drop saves roughly $64 a month per $100,000 borrowed, so a typical $3,000–$5,000 in fees is recovered in about 3–4 years. Use the break-even number above against how long you will keep the loan.
What are typical refinance closing costs?
In the US they usually run 2–5% of the loan amount — lender fees, appraisal, title insurance, recording, and any discount points. On a $300,000 loan that is roughly $6,000–$15,000, though many lenders offer lower- or no-closing-cost options at a slightly higher rate.
Will refinancing reset my loan to 30 years?
Only if you choose a 30-year term. You can refinance into a 15- or 20-year loan to keep your payoff date close. Resetting an 8-year-old loan back to 30 years lowers the payment but usually increases total interest — the calculator's lifetime-interest figure shows this.
Does refinancing hurt my credit score?
There is a small, temporary dip from the hard inquiry and the new account, typically a few points that recover within a few months. Rate-shopping multiple lenders within a 14–45 day window counts as a single inquiry, so compare offers freely.
Should I do a cash-out refinance?
A cash-out refinance lets you borrow against your equity, but it raises your balance and payment, so this payment-focused calculator will usually label it "not worth it on payment alone." That is expected — judge a cash-out by the rate you pay versus the cost of other borrowing, not by monthly savings.
Can I refinance with no closing costs?
Yes. A no-closing-cost refinance rolls the fees into a slightly higher interest rate or the loan balance. It is a good fit if you might move or refinance again within a few years, because you avoid paying upfront for savings you may not keep long enough to earn back.