Refinance calculator
Enter your loan and the new rate, see what you save.
Should I refinance my mortgage?
It can pay off when the savings cover the closing costs well before you sell or pay off the home. Compare the monthly savings, the break-even point and the total interest.
How is the break-even point calculated?
Closing costs ÷ monthly savings. $6,000 in costs with $240 saved a month takes 25 months to earn back.
Example: what would I save?
$300,000 left at 7% with 28 years to go costs $2,038.83 a month. At 6% for 30 years it is $1,798.65 — $240.17 less. Even with 2 extra years of payments and $6,000 in costs, it saves about $31,500 in interest.
Can refinancing cost more in total?
Yes. Stretching a loan over more years can lower the payment but raise the total interest — the calculator shows both, so check the line under the answer.
What about a shorter term?
A 15-year refinance usually raises the monthly payment but cuts the total interest sharply. Enter 15 as the new term to compare.
What happens if I restart the clock on a 30-year term?
Starting over lowers the payment but stretches the payoff. In the example below, a new 30-year loan saves $200 a month but only about $26,276 in total interest after costs, while keeping the 28 years that remain saves $161 a month and about $49,167 overall.
What the calculator compares
It computes the monthly payment on your current balance at the current rate over the months you have left, and the payment on the same balance at the new rate and term. The difference is the monthly saving. Dividing the closing costs by the monthly saving, rounded up, gives the break-even point in months. The total interest to the end of each loan is the payment times the number of months, minus the balance, and the net saving is the old interest minus the new interest minus the costs. It assumes the costs are paid in cash and ignores taxes, escrow and any cash taken out.
A worked example
You owe $250,000 at 7% with 28 years (336 months) left, a payment of $1,699.02. A new 30-year loan at 6% with $5,000 of costs has a payment of $1,498.88, saving $200.15 a month, so the costs are earned back in 25 months, a little over two years. Interest left to pay falls from $320,871 to $289,595. If you keep the 28-year term at 6%, the payment is $1,537.81, the break-even is 32 months and the interest saved after costs is $49,167. Which is better depends on whether you want the lower payment or the lower total cost.
Common mistakes
Comparing payments without looking at the term is the biggest one: a lower payment on a longer loan can cost more in total interest. Ignoring the break-even point is the second; if you expect to sell or refinance again before it, the costs are never recovered. Rolling closing costs into the new balance changes the numbers, because you then pay interest on them, so enter the balance you will actually owe. And the quoted rate may come with points or fees that belong in the cost figure.
Sources: the standard fixed-rate amortization formula, payment = balance × r ÷ (1 − (1 + r)^−n), with r the monthly rate; the break-even method (costs divided by monthly savings) is the one described in consumer refinancing guides such as those of the Consumer Financial Protection Bureau. Related: mortgage calculator, amortization calculator, closing cost calculator and mortgage points calculator.
Estimates for planning only — not financial advice. Your lender's figures decide. How we check our calculators.