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- Compares your current mortgage payment with the payment on a new loan at a new rate and term.
- Shows your monthly savings and the break-even point: how many months it takes for the savings to repay the closing costs.
- Adds up every remaining payment on both loans so you can see the lifetime savings or extra cost.
- Handles closing costs paid in cash or added to the loan, and cash-out refinancing.
How to use the refinance calculator
Enter your current loan
Type your current balance, interest rate and how many years are left. Your monthly statement shows the balance.
Enter the new loan
Add the new rate and term from your lender’s quote.
Add closing costs
Enter the total closing costs and choose whether you pay them upfront or add them to the new loan.
Read the results
Check the monthly savings, the break-even point and the lifetime savings. A refinance can lower your payment and still cost more over time.
How the refinance math works
Monthly payment
M = P × r ÷ (1 − (1 + r)−n)
P = loan amount, r = yearly rate ÷ 12, n = number of monthly payments
The same formula is used for the current loan (with the months left) and the new loan.
Break-even point
Break-even months = closing costs ÷ monthly savings
If you sell or refinance again before this many months, the refinance has not paid for itself yet.
Lifetime savings
Savings = all remaining payments on current loan − (all payments on new loan + closing costs paid in cash − cash out received)
Cash out is subtracted so a bigger loan does not look like a saving.
Refinance examples
Example 1: 7.25% down to 6.25%
A $300,000 balance at 7.25% with 27 years left, refinanced into a new 30-year loan at 6.25% with $6,000 closing costs paid in cash.
The saving is real, but the new loan runs 3 years longer than the old one, which eats into the lifetime result.
Example 2: adding the closing costs to the loan
Same refinance, but the $6,000 is rolled into the new loan, so it becomes $306,000.
No cash upfront, but you pay interest on the closing costs for 30 years.
Example 3: a 15-year cash-out refinance
Same $300,000 balance, but you take $30,000 cash out and choose a 15-year term at 6.25%.
The payment rises by $716.91 a month, but a shorter term cuts the total interest by more than half.
How much does a lower rate save?
Using example 1 (a $300,000 balance at 7.25% with 27 years left, a new 30-year loan and $6,000 closing costs), here is what different new rates do:
Savings by new rate
Monthly savings, break-even point and the lifetime result for each new rate.
- 5.50% $409.21 a month, break-even 15 months, saves $65,264
- 5.75% $361.86 a month, break-even 17 months, saves $48,218
- 6.00% $313.93 a month, break-even 20 months, saves $30,962
- 6.25% $265.43 a month, break-even 23 months, saves $13,502
- 6.50% $216.38 a month, break-even 28 months, costs $4,157 more
- 6.75% $166.79 a month, break-even 36 months, costs $22,009 more
At 6.50% and 6.75% the payment still drops, but resetting to 30 years means you pay more in total.
Where a refinance calculator helps
Rates have dropped
Check if a lower rate is worth the closing costs, and how soon you get them back.
Lowering the payment
See how much a longer term lowers your monthly bill, and what it costs over time.
Paying off faster
Compare a switch to a 15-year or 20-year loan and the interest it saves.
Cash-out plans
See the new payment if you borrow against your equity for repairs or debt payoff.
Payments here are principal and interest only. Ask your lender for a Loan Estimate, compare the APR and total closing costs, and check for prepayment penalties on your current loan. To compare home loans in more detail, see the mortgage calculator, the FHA loan calculator and the VA loan calculator.
Refinance calculator FAQ
When is it worth it to refinance?
When the monthly savings repay your closing costs well before you expect to move or refinance again, and the lifetime result is still a saving. Many people look at it once the new rate is around 0.75 to 1 percentage point lower, but your break-even point is the better test.
How do I calculate my refinance break-even point?
Divide the total closing costs by the monthly savings. For example, $6,000 ÷ $265.43 is about 22.6, so you break even in the 23rd month.
Can a refinance lower my payment but cost more?
Yes. If the new loan is longer than the time left on your current loan, you make more payments. In the table above, a 6.50% rate lowers the payment by $216.38 but costs $4,157 more in total.
Should I roll closing costs into the loan?
It saves cash today but you pay interest on those costs for the whole loan. In example 2 it cut the lifetime savings from $13,502 to $6,202.
What closing costs should I expect?
Refinance closing costs often run about 2% to 5% of the loan amount, covering lender fees, appraisal, title and any discount points. Your Loan Estimate lists them.
What is a cash-out refinance?
You borrow more than you owe and receive the difference in cash. The new loan is larger, so the calculator subtracts the cash you receive when it works out the lifetime savings.