Refinance Calculator
Compare your current mortgage against a new rate and term to see your monthly savings — and how long it takes to break even on closing costs.
🇺🇸 United StatesHow this refinance calculator works
Refinancing replaces your existing mortgage with a new one — ideally at a lower rate. To see whether it pays off, we first compute your current monthly payment from your loan balance, current rate, and the years remaining, using the amortization formula M = P · r / (1 − (1 + r)⁻ⁿ). We then compute a new monthly payment on the same balance with your new rate and new term.
The gap between those two payments is your monthly savings. A lower rate reduces the payment, but choosing a longer new term (for example, resetting a loan with 27 years left back to a fresh 30 years) can offset some of that benefit by stretching the balance over more months.
Refinancing is not free — you pay closing costs such as appraisal, lender, and title fees. We divide those costs by your monthly savings to find your break-even point: the number of months it takes for the savings to repay the cost of refinancing. If you will stay in the home well past that point, the refinance generally makes sense; if you might sell sooner, it may not.
This tool compares principal and interest only and does not account for cash-out amounts, escrow or tax changes, or removing PMI. Use it to gauge whether a refinance is worth exploring, then ask a licensed loan officer for an exact quote based on your credit and the current market.
Refinance questions
It calculates your current monthly principal and interest from your loan balance, current rate, and remaining term, then does the same for the new loan using your new rate and term. The difference is your monthly savings. We then divide your closing costs by that monthly savings to find your break-even point.
The break-even point is how many months it takes for your monthly savings to add up to the cost of refinancing. If you plan to stay in the home longer than the break-even point, the refinance generally pays off; if you may move or sell sooner, it may not.
If your new rate is not low enough, or you extend the term back out to 30 years, your new payment can be close to — or higher than — your current one. When monthly savings are zero or negative, the refinance never breaks even at those terms, even though lengthening the term alone can still lower a payment.
You enter your estimated closing costs (appraisal, lender fees, title, and so on), and we use them to calculate the break-even point. This tool focuses on principal and interest; it does not model cash-out amounts, escrow changes, or PMI removal, which can also affect the real value of a refinance.
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