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Mortgage Refinance Calculator

Find out if refinancing your mortgage makes sense. Compare your current loan against a new one to see monthly savings, break-even point, and total interest saved over the life of the loan.

Current Loan

New Loan

Refinance Formulas

Monthly Payment = P × [r(1+r)^n] ÷ [(1+r)^n − 1]
Monthly Savings = Old Payment − New Payment
Break-even (months) = Closing Costs ÷ Monthly Savings
Total Savings = Old Interest − New Interest − Closing Costs

Where P = principal, r = monthly rate (annual rate ÷ 12), n = total payments (years × 12). The break-even point is the number of months you must stay in the home for refinancing to be worthwhile.

How to Use the Mortgage Refinance Calculator

  1. 1
    Enter Current Loan Details
    Input your remaining loan balance, current interest rate, and years left on the mortgage. Your current monthly payment is optional — it will be auto-calculated from the balance and rate if left blank.
  2. 2
    Enter New Loan Terms
    Enter the new interest rate and loan term you have been offered. Include estimated closing costs, which typically range from 2–5% of the loan amount.
  3. 3
    Review Monthly Savings
    See how much less you will pay each month with the new loan. A positive number means refinancing lowers your payment.
  4. 4
    Check the Break-even Point
    The break-even point shows how many months until the cumulative savings exceed your closing costs. If you plan to stay in the home longer than this, refinancing likely makes financial sense.

Example Calculation

Balance $280,000, current rate 7.5%, 25 yrs remaining → refinance to 6.25%, 30 yrs, closing costs $5,000:

Old payment = $280,000 × [0.625%(1.00625)^300] ÷ [(1.00625)^300−1] ≈ $2,062/mo
New payment = $280,000 × [0.521%(1.00521)^360] ÷ [(1.00521)^360−1] ≈ $1,724/mo
Monthly savings = $2,062 − $1,724 = $338/mo
Break-even = $5,000 ÷ $338 ≈ 15 months

Frequently Asked Questions

Refinancing typically makes sense when you can lower your interest rate by at least 0.5–1%, you plan to stay in the home long enough to recoup closing costs (break even), your credit score has improved since you took out the original loan, or you want to switch from an adjustable-rate to a fixed-rate mortgage. Always calculate the break-even point before deciding.

Closing costs are fees paid when you finalize the new loan. They typically include origination fees, appraisal fees, title insurance, government recording fees, and prepaid items like property taxes and homeowners insurance. Closing costs usually range from 2–5% of the loan amount. Some lenders offer no-closing-cost refinances, but these typically roll the costs into the loan balance or charge a higher interest rate.

The break-even point is the number of months it takes for your cumulative monthly savings to equal the closing costs you paid upfront. For example, if closing costs are $5,000 and you save $250/month, you break even in 20 months. If you sell or refinance again before that point, the refinance will have cost you money overall.

Refinancing involves a hard inquiry on your credit report, which may cause a small, temporary dip in your score (typically 5–10 points). This effect usually disappears within a few months. If you shop multiple lenders within a short window (14–45 days depending on the scoring model), most scoring systems count all inquiries as a single inquiry, minimizing the impact.

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