Refinance Calculator
The Refinance Calculator helps you determine whether refinancing your mortgage makes financial sense. Enter your current loan balance, rate, and remaining term alongside the new loan terms and closing costs to instantly see your monthly savings, break-even timeline, and total interest saved over the life of the loan. A good rule of thumb: refinancing pays off when you save at least 1% in rate and plan to stay in the home past the break-even point.
Typically 2–5% of loan amount
Extra cash pulled from equity (0 for rate-and-term refi)
Monthly Savings
$261.46
Break-Even Point
23 months (2 yrs)
New Monthly Payment
$1,807.71
Current Monthly Payment
$2,069.18
Interest Saved Over Loan Life
-$24,024.65
How to use this calculator
- 1
Enter your current loan balance
Input the remaining principal balance on your existing mortgage — find this on your most recent mortgage statement.
- 2
Enter your current interest rate and remaining term
Input your existing rate and how many years are left on your current loan so the calculator can compute your existing monthly payment.
- 3
Enter the new rate and loan term
Input the new interest rate you have been offered and the term of the refinanced loan (typically 15 or 30 years).
- 4
Add closing costs
Enter the total closing costs your lender quoted. These are rolled into the break-even calculation — refinancing only saves money after you recoup these costs through lower payments.
- 5
Add cash-out amount (optional)
If you are doing a cash-out refinance, enter the amount you are pulling from equity. This increases your new loan balance and affects savings.
- 6
Review your break-even and savings
The calculator shows your monthly savings, the number of months until you break even on closing costs, your new payment, and total interest saved over the loan life.
Formula
Monthly Payment = P × [r(1+r)^n] / [(1+r)^n − 1]
Where P = principal, r = monthly rate, n = months
New Loan Amount = Current Balance + Closing Costs + Cash-Out
Monthly Savings = Current Payment − New Payment
Break-Even (months) = Closing Costs ÷ Monthly Savings
Interest Saved = (CurrentPayment × RemainingMonths − CurrentBalance)
− (NewPayment × NewTermMonths − NewLoanAmount)Both the current and new monthly payments use the standard amortization formula. The break-even point divides total closing costs by the monthly savings — for example, $6,000 in closing costs with $200/month in savings gives a 30-month (2.5-year) break-even. If you sell or refinance again before that point, you lose money on the refinance. Interest saved compares total interest over each loan's remaining life.
Worked Example
Current Balance: $280,000 Current Rate: 7.50% → Monthly payment: ~$2,066 Remaining Term: 25 years New Rate: 6.50% New Term: 30 years Closing Costs: $6,000 Cash-Out: $0 New Loan Amount: $280,000 + $6,000 = $286,000 New Monthly Payment: ~$1,808 Monthly Savings: $2,066 − $1,808 = $258 Break-Even: $6,000 ÷ $258 ≈ 24 months (2 years) If you plan to stay in the home more than 2 years, this refinance saves money. Over the new 30-year term, total interest paid drops by roughly $42,000.