Mortgage Refinance Calculator
Compare your current mortgage to a refinance and see your new payment, monthly savings, break-even point, and lifetime interest saved.
Understanding the Mortgage Refinance Calculator
A refinance replaces your existing mortgage with a new loan, usually to secure a lower rate, change the term, or tap equity. This calculator estimates your new monthly payment, the monthly savings versus your current loan, and the break-even point, the number of months it takes for those savings to recover the closing costs. It is built for homeowners weighing whether refinancing is worthwhile. Results are estimates; your actual rate, fees, and approval depend on credit, equity, and lender terms, so treat the output as a starting point for comparison shopping.
How it works
Enter your current payment (or remaining balance, rate, and term) plus the new loan's rate, term, and estimated closing costs. The tool computes the new monthly payment with the standard amortization formula, subtracts it from your current payment to find monthly savings, then divides total closing costs by that saving to find the break-even month. If you plan to stay in the home well beyond break-even, refinancing typically pays off. Note that extending the term can lower the payment yet raise total interest paid, so compare lifetime cost, not just the monthly figure.
Worked example
Your balance is 250,000 at 6.5% with a 30-year payment of about 1,580. Refinancing to 5.5% over 30 years gives a payment near 1,419, saving roughly 161 a month. If closing costs are 5,000, break-even is 5,000 / 161, about 31 months. Stay past two and a half years and you come out ahead; sell or refinance again sooner and the closing costs outweigh the savings.
Tips & common mistakes
- Compare total interest over the life of both loans, not just the monthly payment, since a longer term can cost more overall.
- Include all closing costs (origination, appraisal, title) in the break-even calculation, not only the rate.
- A 'no-cost' refinance usually rolls fees into a higher rate or balance; it is rarely truly free.
- If you will move or refinance again before break-even, the upfront costs may not be recovered.
- Check whether your current loan has a prepayment penalty before assuming refinancing is cost-free.
Sources & methodology
- • Consumer Financial Protection Bureau — When to refinance and break-even guidance (https://www.consumerfinance.gov)
- • Freddie Mac — Refinance basics and rate research (https://www.freddiemac.com)
Related tools
Reviewed by the TopOpenTools editorial team · Last updated June 2026. These tools provide general estimates for educational purposes only and are not financial, tax, insurance, investment, or medical advice. Verify important decisions with a qualified professional.
Frequently Asked Questions
How does the break-even point work?
It is the number of months it takes for your monthly savings to cover the closing costs of refinancing. If you plan to keep the home longer than the break-even period, refinancing usually makes sense.
Why might refinancing cost more over time?
If you refinance into a longer term, your monthly payment can drop while your total lifetime interest rises. The calculator shows lifetime interest saved or added (after closing costs) so you see the full picture.
Is my information stored?
No. Everything is calculated in your browser. Nothing you enter is sent to a server.