How to use Refinance Calculator
This refinance calculator helps you decide whether replacing your current mortgage with a new loan is worth it. Enter your existing balance, rate and remaining term alongside the new rate, term and closing costs to compare monthly payments, lifetime interest and — most importantly — the break-even point, the number of months it takes for your monthly savings to recover the upfront costs of refinancing.
- Enter your current loan balance, interest rate and remaining months.
- Enter the new interest rate and new loan term you are considering.
- Add the estimated closing costs for the refinance.
- Compare the current and new monthly payments and the monthly savings.
- Check the break-even point to see how long until the move pays off.
Your data never leaves your device — 100% private processing.
How the break-even point works
Refinancing usually carries closing costs — appraisal, origination and title fees — that you pay upfront to secure a lower rate. The break-even point is those closing costs divided by your monthly payment savings, rounded up to whole months. If you plan to keep the home and loan beyond that point, refinancing saves money; if you might move or refinance again sooner, the upfront costs may never be recovered. A higher new rate produces no monthly savings and therefore no break-even.
| Closing costs | Monthly savings | Break-even |
|---|---|---|
| $4,000 | $200 | 20 months |
| $4,000 | $150 | 27 months |
| $6,000 | $250 | 24 months |
Beyond the monthly payment
A lower monthly payment can be appealing, but extending the term can increase the total interest you pay even at a lower rate, because you are borrowing for longer. Compare the lifetime interest of both loans, not just the monthly figure. Refinancing into a shorter term often raises the payment but slashes total interest, while cash-out refinancing increases the balance. Always weigh the break-even point against how long you realistically expect to keep the loan.
Worked examples
Rate drop
Inputs: $300k · 7%→6% · 240 mo · $4k costs
Result: Lower payment · break-even in ~20 months
Higher new rate
Inputs: new rate above current
Result: No savings · no break-even
Glossary
- Refinance
- Replacing an existing loan with a new one, usually to get a better rate or term.
- Break-even point
- The number of months of savings needed to recover refinancing closing costs.
- Closing costs
- Upfront fees paid to set up the new mortgage.
- Lifetime interest
- The total interest paid over the entire life of a loan.
- Cash-out refinance
- Refinancing for more than you owe to take the difference as cash.
Related reading
Frequently Asked Questions
Why use Refinance Calculator?
- Break-even month shows exactly when monthly savings recover the upfront closing costs
- Compares current and new loans side by side on monthly payment and total interest paid
- Flags when a longer new term increases lifetime interest despite a lower monthly payment
- Handles any remaining balance, remaining term and closing-cost figure for real scenarios
Common use cases
- Decide whether a 1% rate drop justifies $4,000 in closing costs on a $280,000 balance
- Find the break-even month to confirm you plan to stay in the home long enough to benefit
- Compare refinancing to a shorter term to see the payment increase versus the interest saved
- Test whether a no-closing-cost option at a slightly higher rate beats paying fees upfront
- Model a cash-out refinance by entering the increased balance and checking the new monthly payment
Get weekly tool tips & updates
New tools, power-user tips, and productivity hacks — delivered free every Friday.
No spam, ever. Unsubscribe with one click.
Related Finance
Profit Margin Calculator
Calculate profit margin, markup, revenue, and profit from cost and price. Switch between margin and markup instantly. Free and private.
VAT Calculator
Add or remove VAT at any rate. Calculate gross, net, and VAT amount for invoices and receipts in any currency. Free, private VAT calculator.
Mortgage Calculator
Calculate your monthly mortgage payment, total interest, and see a full amortization schedule. Free online mortgage calculator.
Loan Calculator
Calculate your loan monthly payment, total interest, and payoff. Compare rates and terms instantly with this free online personal loan calculator.
APR Calculator
Calculate the true annual percentage rate (APR) of a loan including fees. See how upfront costs raise your effective rate. Free and private.
Compound Interest Calculator
Calculate compound interest with monthly contributions. See how your investment grows over time with our free compound interest calculator.
Explore all Finance.