Mortgage Refinance Calculator
Compare your current loan to a new one. See monthly savings, break-even, and total interest savings.
How to use the mortgage refinance calculator
Enter your remaining loan balance, current rate and years left, then the new rate and term you're considering. Add closing costs (typically 1–2% of the loan). The calculator shows monthly savings, break-even months, and total interest savings.
Refinance break-even by rate difference
How many months to recoup $4,000–$6,000 in closing costs at different monthly savings. Based on typical 30-year fixed refi costs.
| Monthly savings | $4,000 costs | $5,000 costs | $6,000 costs |
|---|---|---|---|
| $100 | 40 mo | 50 mo | 60 mo |
| $150 | 27 mo | 34 mo | 40 mo |
| $200 | 20 mo | 25 mo | 30 mo |
| $300 | 14 mo | 17 mo | 20 mo |
| $400 | 10 mo | 13 mo | 15 mo |
| $500 | 8 mo | 10 mo | 12 mo |
Rule of thumb: Refinance if you'll stay in the home past break-even and rates are at least 0.75–1% lower.
When does refinancing make sense?
Refinancing can lower your payment, shorten your term, or both. It usually makes sense when: (1) rates have dropped at least 0.75–1% below your current rate, (2) you plan to stay in the home past the break-even point, and (3) you can qualify for the new loan. Use our mortgage affordability calculator to see how much house you can afford, or the DTI calculator to check your debt-to-income before applying.
Common Questions About Mortgage Refinancing
What is the refinance break-even point and why does it matter?
The break-even point is the number of months it takes for your monthly payment savings to equal your refinance closing costs. For example, if you pay $5,000 in closing costs and save $250 per month, you break even at 20 months. Only refinance if you plan to stay in the home past this point—otherwise you lose money. Use the calculator above to see your break-even based on your loan balance, rate difference, and closing costs.
How much lower should my new rate be to justify refinancing?
A common rule of thumb is to refinance when the new rate is at least 0.75% to 1% lower than your current rate. On a $300,000 loan, a 1% rate drop saves roughly $180/month. With typical closing costs of $4,000–$6,000, break-even is often 22–33 months. Smaller rate drops (e.g., 0.5%) usually take 4–5+ years to break even, which may not be worth it unless you're certain you'll stay.
What closing costs can I expect when refinancing?
Refinance closing costs typically run 1–2% of the loan amount. On a $400,000 loan, expect $4,000–$8,000. Costs include: appraisal ($400–600), title search and insurance ($500–2,000), origination/lender fees ($0–1% of loan), credit report, and prepaid items (property taxes, insurance). Some lenders offer no-closing-cost refinances by rolling fees into a slightly higher rate—compare both options with our calculator.
Does refinancing extend or shorten my payoff timeline?
It depends on the new term you choose. If you had 20 years left on a 30-year loan and refinance into another 30-year mortgage, you're extending your payoff by 10 years—even if the payment drops. To shorten your payoff, choose a 15-year or 20-year term. You'll pay more per month but save significantly on interest and own the home sooner. Use the calculator to compare total interest paid under different scenarios.
When should I avoid refinancing?
Avoid refinancing if: (1) you're moving within the break-even period, (2) the rate drop is less than 0.5% and closing costs are high, (3) your credit has worsened and you'd get a worse rate, or (4) you're already near the end of the loan—most of your remaining payment is principal, so rate savings are minimal. Also consider whether you'll need cash soon; a cash-out refinance increases your loan balance and resets the term.