Mortgage Refinance Calculator

Should you refinance? Compare your current mortgage to a new loan, see monthly savings, break-even months, and lifetime interest.

Current Loan

Current loan balance*

The remaining balance on your current mortgage

Current interest rate*

Remaining term*

New Loan

New interest rate*

New loan term*

Closing costs

Origination, appraisal, title, and other fees. Typically 2–5% of the loan.

How break-even works: Closing costs ÷ monthly savings = months to break even. If you stay in the home longer than that, refi saves you money. If you sell or refi again sooner, you'd lose money on the deal.

Should You Refinance Your Mortgage?

Refinancing replaces your existing mortgage with a new one — usually at a lower interest rate, a shorter term, or both. Done right, it can save tens of thousands of dollars in interest. Done wrong, the closing costs eat the savings. The calculator above shows you the break-even point and lifetime interest change so you can decide on the math, not the marketing.

The Break-Even Rule

The single most important number on a refinance is the break-even point. It's calculated as:

break-even months = closing costs ÷ monthly savings

If you stay in the home longer than the break-even point, refinancing wins. If you sell or refi again before that, the closing costs cost you more than the lower rate saved.

A Worked Example

Imagine a $300,000 mortgage balance at 7.0% with 25 years remaining. Monthly P&I is roughly $2,121. A refi to 5.5% on a new 30-year loan at $5,000 closing costs gives a monthly P&I of about $1,704 (on a $305,000 new loan that includes the closing costs). That's a $417/month savings.

Break-even: $5,000 ÷ $417 = ~12 months. If you stay in the home longer than a year, refi pays.
Watch the term reset. The new 30-year clock means you'd pay 5 more years total. If lifetime interest matters, also try a 20- or 15-year refi at the new rate.

When Refinancing Makes Sense

Rates have dropped 0.5%+ since you closed. Even small drops are meaningful on large balances.
Your credit score has improved. Going from 660 to 760 can drop your rate by 0.5–1%.
You want to drop PMI. If your home value has appreciated past 20% equity, refi can eliminate PMI even without a rate drop.
You want to shorten the term. 30-year to 15-year refinances can cut total interest in half.
You're switching from ARM to fixed. Locking a fixed rate before your ARM resets to a higher market rate.

When to Skip the Refi

You're planning to sell within the break-even window.
Closing costs would be rolled in at a much higher rate (effectively erasing savings).
You're more than halfway through your current mortgage — most of the interest is already behind you.
You'd reset a 25-year remaining term back to 30, paying more total interest even at a lower rate.

Shopping a Refi

Get loan estimates from at least 3 lenders within a 14-day window — credit bureaus treat multiple mortgage inquiries in that span as one for FICO purposes. Compare APR (not just rate) since APR rolls in fees. The calculator above lets you re-run the math on each offer to see which actually saves the most after closing costs.

Disclaimer: This calculator is for educational purposes and provides estimates based on the inputs you provide. Actual refinance offers, fees, and savings will vary by lender and your specific situation. Consult a licensed mortgage professional for personalized advice.

Frequently Asked Questions

When does refinancing a mortgage make sense?

Refinancing typically makes sense when the new rate is at least 0.5–1 percentage point lower than your current rate AND you'll keep the loan long enough to recoup the closing costs. Use the break-even calculation: closing costs ÷ monthly savings = months to break even. If you'll stay in the home longer than that, refi pays off.

What is the break-even point on a mortgage refinance?

Break-even = total closing costs ÷ monthly savings. If your new payment is $200/month lower and closing costs are $5,000, you break even in 25 months. After that, every month is pure savings. If you sell or refinance again before break-even, you actually lose money on the deal.

What are typical mortgage refinance closing costs?

Closing costs typically run 2–5% of the loan amount. On a $300,000 refinance, expect $6,000–$15,000 in fees: appraisal, title insurance, origination, recording fees, and pre-paid taxes/insurance. Some lenders offer 'no-cost' refinances that roll fees into the loan or charge a slightly higher rate instead.

Should I refinance to a 15-year mortgage?

If you can afford the higher payment, yes — 15-year rates are typically 0.5–0.75% lower than 30-year rates, and you slash total interest dramatically. The trade-off is cash flow flexibility. Use the calculator to see if the higher payment fits your budget while still leaving room for emergencies and other goals.

How does my credit score affect a refinance rate?

Each 20-point band of credit score can change your rate by 0.125–0.25%. Going from 700 to 760+ on a $300K refi can save $30K+ over 30 years. Check your score before applying and pay down credit cards to push your utilization below 10% for the best rate quote.

Can I refinance to take cash out of my home?

Yes — a cash-out refinance lets you borrow more than your current balance, with the difference paid to you in cash. It's typically used for home improvements or debt consolidation, but you'll likely pay a slightly higher rate and you're putting your home up as collateral for the new (larger) loan.