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.
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.
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 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?"
| 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.
| 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.
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.
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.
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.
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.
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.
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.