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Mortgage Refinance Calculator
See whether a lower rate could pay off: your new payment, how long until closing costs are recovered, and the difference in total interest.
Your result
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How to use this refinance calculator
Enter your current balance, rate and the years left on your mortgage (find them on your latest statement). Then add the new rate, term and closing costs from a lender's Loan Estimate. The result shows your new principal-and-interest payment, monthly savings, the break-even point and how total interest compares.
How it's calculated
Break-even (months) = Closing costs ÷ Monthly savings r = rate ÷ 12, n = months. Lifetime difference = remaining payments on your current loan − (all payments on the new loan + closing costs paid in cash). Taxes, insurance and PMI are left out because they usually don't change with a refinance.
Worked example
- Current payment ≈ $2,113; new payment ≈ $1,847
- Monthly savings ≈ $265
- Break-even ≈ $6,000 ÷ $265 = 23 months
- Total interest left drops from about $384,500 to $365,000, saving about $13,500 even after closing costs
When refinancing may make sense
A refinance tends to pay off when you'll stay in the home well past the break-even point and the rate drop is large enough to cover the costs. People also refinance to drop PMI, switch from an adjustable to a fixed rate, shorten the term or take cash out. Each has trade-offs, so it's worth comparing several Loan Estimates.
Common questions
How much does the rate need to drop to refinance?
There's no fixed rule. The old "1% drop" guideline is a rough starting point; what matters is whether your monthly savings recover the closing costs before you move or refinance again.
Does refinancing restart my loan?
Yes. A new 30-year loan resets the clock, which lowers the payment but can add years of interest. Choosing a shorter term, or making extra payments, can avoid that.
Should I roll closing costs into the loan?
Rolling them in means no cash at closing but a larger balance and more interest. Paying them upfront keeps the loan smaller. Tick the box above to compare both.
What are typical refinance closing costs?
Often 2% to 5% of the loan amount, including lender fees, appraisal, title insurance and recording fees. Your Loan Estimate lists them.