Refinance Calculator
Compare your current mortgage payment with a new refinance rate and term, including closing costs and the break-even point.
Current loan
New loan
New monthly payment
$1,703.37
Old: $2,236.72/mo
Monthly savings
$533.35
Compared with your current loan
Extra cost
$81,399
You pay more over the life of the new loan
Break-even
10 months
$5,000 closing costs recouped
Estimate for a US mortgage. Extending the term can lower the payment but add interest overall — check the total-savings card before deciding.
How it works
Savings = old payment − new payment. Break-even = closing costs ÷ monthly savings. Interest saved = old total interest − new total interest.
Example: refinancing $250,000 from 7% to 5.5% over 30 years → saves ~$244/month, break-even ≈ 17 months at $4,200 closing costs.
Last updated: July 2026
How this calculator is verified
Checked by True Calculator automated test suite on
- Formula verified against a published worked example in the automated test suite
- Edge cases (zero, negative, boundary and unit-mismatch inputs) covered by unit tests
The full verification method is on our how we verify page. Found an error? Tell us and we will re-check it.
When to Use This Calculator
Use this calculator when you own a US property and the interest-rate environment changes, because refinancing is only worth it when the savings outlive the closing costs. NRIs with US mortgages, investors with rental properties, and homeowners approaching a rate reset all face the same question: does a lower rate on a new loan justify the upfront fees? The tool compares your current payment with the new payment, shows the monthly saving and the total interest under both scenarios, and computes the break-even month — closing costs divided by the monthly saving. If the break-even is beyond your expected stay in the home, the refinance usually does not pay for itself. Run a few rate and term combinations before committing.
How to Use This Calculator
- Step 1: Enter your current mortgage balance, your existing rate and the years remaining on the term.
- Step 2: Enter the new rate you are offered and the new term, such as 30 years or the remaining years.
- Step 3: Enter the closing costs you expect to pay for the refinance, such as lender fees and appraisals.
- Step 4: Read the new monthly payment, the monthly saving, the total interest comparison and the break-even point in months.
Worked Example
A homeowner with a $300,000 balance at 7% for 30 years pays about $1,996 per month. Enter the current balance, rate and remaining term, then try a refinance at 5.5% for 30 years; the new payment is about $1,703, saving about $293 every month. With $6,000 in closing costs, the break-even point is about 20 months, since 6000 divided by 293 is about 20.5. The calculator compares the total interest under both scenarios, not just the monthly saving.
Tips and Common Mistakes
- •Tip 1: The break-even month is closing costs divided by the monthly saving; stay in the home that long and the refinance starts paying for itself.
- •Tip 2: A lower rate on a fresh 30-year term can add years of interest even with a lower payment, so compare total interest, not just the payment.
- •Tip 3: Some closing costs are rolled into the new loan, which raises the balance slightly and lengthens the true break-even.
- ✗Mistake 1: Comparing the new payment against your original payment instead of your current balance's payment, which overstates the saving.
- ✗Mistake 2: Ignoring closing costs entirely, since a modest monthly saving can take years to recover the upfront fees.
Frequently Asked Questions
How do I know if refinancing is worth it?
Compare your current monthly payment and total interest against the new loan's. This calculator shows the monthly savings, the break-even point and total interest saved, so you can decide if the closing costs are justified.
What is the break-even point in refinancing?
It is the number of months for your monthly savings to cover the refinance closing costs. If you plan to stay in the home past that point, the refinance generally pays off.
Should I refinance to a lower rate or a shorter term?
A lower rate cuts your payment; a shorter term (for example 30 to 15 years) builds equity faster and saves far more interest, though your monthly payment may rise. Enter both scenarios to compare.
Does refinancing affect my credit score?
Lenders run a hard credit inquiry and your old loan closes while a new one opens, which can cause a small, temporary score dip. Most people's scores recover within a few months of on-time payments.
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