Mortgage Refinance Calculator
See your monthly savings and break-even point from refinancing your mortgage.
How mortgage refinance savings are calculated
This calculator compares your current monthly payment — based on your remaining balance, current rate, and remaining term — to a new payment based on the same balance financed at a new rate and new term. The difference between the two is your estimated monthly savings. It then divides your estimated closing costs by that monthly savings to find your break-even point: how many months it takes for the savings to outweigh the cost of refinancing.
What is a break-even point and why does it matter?
Your break-even point tells you how long you need to keep the new loan before refinancing actually pays off. If you plan to move or refinance again before reaching that point, the closing costs may outweigh the savings, making refinancing a net loss. As a rule of thumb, refinancing tends to make the most sense when you plan to stay in the home well beyond your break-even point, and when the new rate is at least a full percentage point or more below your current rate.
Why resetting your loan term matters
Refinancing into a new 30-year term can lower your monthly payment significantly, even at a similar rate, simply because you're restarting the amortization clock — but it can also mean paying more total interest over time since you're extending how long the balance is outstanding. Comparing the lifetime interest difference, not just the monthly payment, gives you a fuller picture of whether a refinance truly saves you money.
Frequently Asked Questions
How is my refinance break-even point calculated?
This calculator divides your estimated closing costs by your monthly savings (current payment minus new payment) to find how many months it takes for the savings to fully offset the cost of refinancing.
What if refinancing doesn't lower my payment?
If the new rate and term don't produce a lower payment than your current loan, this calculator will tell you that refinancing wouldn't save you money at these rates, since a break-even point can't be calculated without positive monthly savings.
How much lower does my rate need to be to make refinancing worth it?
A common rule of thumb is looking for at least a 0.5-1 percentage point reduction, though the real answer depends on your closing costs, remaining balance, and how long you plan to stay in the home. Use the break-even point above to judge your specific situation rather than relying on a generic rule.
Does refinancing into a new 30-year term cost me more overall?
It can, even if your monthly payment drops, because restarting a 30-year amortization schedule extends how long you're paying interest. Check the lifetime interest difference in the results above to see the full trade-off, not just the monthly savings.
What closing costs should I expect when refinancing?
Refinance closing costs typically run 2-5% of the loan amount and include appraisal fees, title insurance, origination fees, and recording fees. Some lenders offer "no closing cost" refinances that roll these costs into a slightly higher interest rate instead of charging them upfront.
Should I refinance to a shorter loan term?
Refinancing into a shorter term, like 15 years, usually increases your monthly payment but significantly reduces total interest paid and builds equity faster. It works well if you can comfortably afford the higher payment and want to be debt-free sooner.
How long should I plan to stay in my home before refinancing?
Ideally, you should plan to stay at least as long as your break-even point, and preferably longer, so the monthly savings clearly outweigh the closing costs. If you expect to sell or refinance again soon, the upfront costs may not be worth it.
Can I refinance if I have little home equity?
It depends on the loan type and lender requirements — some conventional refinances require at least 20% equity to avoid PMI, but certain government-backed programs allow refinancing with less equity. Check with lenders about specific loan-to-value requirements for your situation.