Refinance Calculator

Compare your current mortgage with a new loan to see monthly savings, the break-even point on closing costs and lifetime savings.

  • Reviewed October 2026
  • Formula and worked example below
  • Free, no sign-up, runs in your browser
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Enter your numbers to see the result.

Three numbers decide a refinance

  1. Monthly savings: the difference between your current and new principal-and-interest payment.
  2. Break-even point: closing costs divided by monthly savings. If you will sell or refinance again before this point, the refinance loses money.
  3. Lifetime cost: total remaining payments on the old loan versus total payments on the new loan plus closing costs.

Break-even months = Closing costs ÷ Monthly savings

Example

You owe $280,000 at 7.25% with 27 years left, paying $1,971.74 a month. Refinancing into a new 30-year loan at 6.0% drops the payment to $1,678.74, saving $293 a month. With $6,000 in closing costs, you break even after 21 months and save about $28,500 over the life of the loans. Choosing a 25-year term instead saves less each month ($168) but about $91,600 overall, because you are not adding three extra years of payments.

The trap of resetting the clock

A lower payment does not always mean a cheaper loan. If you have 22 years left and refinance into a new 30-year mortgage, you add eight years of interest. Matching the new term to the years you have left, or choosing a shorter term, gives the true comparison.

Rules of thumb

  • A rate drop of about 0.75–1 percentage point is often worth considering, but the break-even point matters more than any rule.
  • Typical closing costs run 2–5% of the loan amount. Ask for a Loan Estimate and compare lenders.
  • A "no-closing-cost" refinance usually means a higher rate or costs added to the balance.
  • Cash-out refinances increase your debt; compare the rate with a home equity loan or HELOC.

Frequently asked questions

When is refinancing worth it?

When you will keep the loan past the break-even point and the total cost of the new loan, including closing costs, is lower than what you would pay on the current loan.

How much does it cost to refinance?

Closing costs are typically 2–5% of the loan amount, covering appraisal, title, origination and other fees.

Does refinancing hurt my credit score?

A hard credit check may lower your score by a few points temporarily. Multiple mortgage inquiries within about 14–45 days usually count as one.

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Last reviewed Oct 20, 2026. Results are estimates; check important decisions with a qualified professional.