Refinance Calculator

The monthly saving compares principal-and-interest payments only. The break-even month divides your closing costs by that saving to show how many payments it takes to recover the cost of refinancing. If you plan to move or refinance again before that month, the new loan likely costs more than it saves.

The lifetime interest comparison tells a different story than the monthly payment does. A refinance can lower your payment while increasing total interest paid, if it extends the term. Look at both figures together before deciding.

Describe your existing loan first: the original amount, its rate and term, and how many payments you have made. The calculator derives your current balance and remaining payments from those, so you do not need to look up the balance — though using your servicer's actual figure is more precise if you have made extra payments.

Then enter the new loan you have been quoted. Choose whether closing costs are paid in cash or added to the balance; rolling them in avoids upfront cash but means paying interest on them for the whole term.

Pay attention to the term you select. Refinancing a loan you are three years into back to a fresh 30 years restarts amortization; setting the new term to match the remaining years gives a cleaner comparison of the rate benefit alone.

The remaining balance on the current loan comes from the amortization identity:

B = P × [ (1 + r)^n − (1 + r)^p ] / [ (1 + r)^n − 1 ]

• P — original principal, r — monthly rate
• n — total payments, p — payments already made

The new payment uses the standard mortgage formula on the refinanced balance:

New loan = balance + cash out + (closing costs, if rolled in)

Break-even months = closing costs ÷ monthly payment saving

Total interest on each side is the sum of payments over the remaining or new term minus the principal repaid.

A $320,000 loan at 7.25% over 30 years has a payment of about $2,183. After 36 payments the balance is roughly $310,000 with 324 payments left, and $397,000 of interest still to come.

Refinancing at 6% for a new 30-year term with $5,000 of costs rolled in creates a $315,000 loan and a payment near $1,889 — a saving of about $294 per month, so the $5,000 of costs is recovered in roughly 17 months. Total interest on the new loan is about $365,000, so the refinance also saves money over the long run despite restarting the clock.

Break-even horizon

Compare the break-even month to how long you actually expect to stay in the home or keep this loan. Moving or refinancing again before that point erases the benefit.

Term reset

Restarting a 30-year clock after paying down an existing loan for several years shifts your amortization back toward mostly-interest payments, even at a lower rate.

Rolled-in costs vs cash

Financing closing costs adds them to the balance you pay interest on for decades; paying cash keeps the balance lower but requires liquidity now.

Cash-out pricing

Lenders treat cash-out refinances as higher risk and price the rate above a comparable rate-and-term refinance, especially above certain loan-to-value thresholds.

PMI and escrow

A refinance can remove private mortgage insurance once equity reaches typical thresholds, but it also triggers a new escrow account funded at closing, separate from any escrow refund from the old loan.

No-cost refinance pricing

A 'no closing cost' refinance simply moves those costs into a higher interest rate. Compare the total interest cost against paying the fees upfront at a lower rate.

• Comparing only the monthly payment

  A lower payment from a longer term can mean more total interest paid. Check the lifetime interest figures, not just the monthly number.

• Ignoring the break-even point

  Refinancing shortly before selling or moving can cost more in fees than it saves in reduced payments.

• Forgetting the new escrow deposit

  Cash needed at closing often includes new escrow funding in addition to the closing costs entered here.

• Assuming a no-cost refinance is free

  The costs are embedded in a higher rate. Run the numbers against a paid-cost option at a lower rate to see which is cheaper over your expected time in the loan.

• Treating cash-out and rate-and-term refinances the same

  Cash-out loans carry higher rates and stricter equity requirements — quotes for the two are not directly comparable.

• Get a loan estimate from at least two or three lenders; closing costs and rates both vary meaningfully between them.
• Match the new term to your remaining years if your goal is a lower rate rather than a lower payment.
• Ask your current servicer when your escrow refund will be issued so you can plan around the gap.
• If you are close to 20% equity, ask whether a new appraisal would let you drop mortgage insurance without a full refinance.
• Run the break-even calculation against how long you realistically expect to keep the loan, not just how long you plan to own the home.

Your actual closing disclosure may include lender credits, discount points, per-diem interest and prepaid escrow items not captured in a single "closing costs" figure. Rate quotes also shift with market conditions between the estimate you get today and your actual rate lock, so use this calculator to compare structures — rolled-in vs. cash, cash-out vs. rate-and-term, short vs. long term — rather than to predict an exact bill.

What this calculator assumes

• The current loan is a fixed-rate mortgage with no extra principal payments made.
• The new loan is fixed-rate and held to maturity.
• Only principal and interest are compared; taxes and insurance are unchanged by a refinance.
• Break-even is measured against payment savings only, ignoring the interest cost of rolled-in fees.

What it does not account for

• Escrow account refunds and new escrow funding at closing.
• Mortgage insurance changes, which can matter if your equity position has moved.
• Cash-out rate adjustments — lenders usually price cash-out refinances higher.
• Tax consequences of interest deductibility on cash-out proceeds.

• Consumer Financial Protection Bureau — Refinancing
• CFPB — Closing costs explainer