Mortgage Refinance Calculator
Refinancing trades upfront closing costs for a lower monthly payment. This calculator shows your new payment, how much you’d save each month, and the break-even point — how long it takes for those savings to recover the cost of refinancing.
How this calculator works
We compute your current monthly payment from the remaining balance, current rate, and years left, then do the same for the proposed new loan. Both use the standard amortization formula with monthly rate r over n payments:
M = P · r · (1 + r)ⁿ / ((1 + r)ⁿ − 1)
The break-even point is simply:
break-even months = closing costs ÷ monthly savings
The catch with break-even
Lowering your rate but resetting to a fresh 30-year term can reduce the monthly payment yet increase total interest, because you’re stretching the loan back out. The “lifetime interest savings” figure accounts for this by comparing total interest on both loans and subtracting closing costs.
Learn more
- Mortgage Basics: What Your Monthly Payment Really Includes — Principal, interest, taxes, insurance, PMI — a clear breakdown of every piece of a mortgage payment and how amortization shifts over the life of the loan.
- When Does Refinancing Actually Make Sense? — Refinancing isn't free — it's a bet on the break-even point. How to know if a refi pays off, the rate-drop rule of thumb, and the trap of resetting your loan term.
- 15- vs 30-Year Mortgage: Which Term Should You Choose? — A shorter term saves a fortune in interest; a longer one buys flexibility. How the two compare, who each suits, and the strategy that captures both.
Frequently asked questions
- What is the break-even point on a refinance?
- It's the number of months of payment savings needed to recoup your closing costs. If you'll move or sell before then, refinancing likely costs more than it saves.
- Why might my lifetime savings be negative even with a lower rate?
- Because extending the term restarts amortization. A lower rate on a longer loan can mean more total interest. Try matching the new term to your years remaining to see the difference.
- Are closing costs always worth it?
- Not always. If you'll stay in the home well past the break-even point and the lifetime savings are positive, refinancing usually helps. Short time horizons rarely justify the costs.