Comprehensive Guide
Learn more in our Loans & Mortgage Guide.
How it works
refinance calculator takes your inputs and produces monthly savings, break-even month, total savings over term, current payment, new payment. Should you refinance? Compare current and new payments, total interest saved, and the break-even month against closing costs. You provide 5 inputs: Current loan balance (currency, in dollars) (default: 300000 dollars); Current rate (percent, in percent) (default: 7 percent); New rate (percent, in percent) (default: 5.75 percent); Remaining term (months, in months) (default: 300 months); Closing costs (currency, in dollars) (default: 6500 dollars). The calculator returns 5 outputs: Monthly savings (the primary result); Break-even month (a secondary output); Total savings over term (a secondary output); Current payment (a supplementary figure); New payment (a supplementary figure). Loans and mortgages are amortized instruments where the split between interest and principal shifts every month. Understanding the total cost of borrowing — not just the monthly payment — is the difference between a sustainable debt load and one that erodes your net worth over time. This calculator reveals the full amortization picture. The underlying formula: Monthly savings = Payment(old rate) - Payment(new rate) | Break-even = closing costs / monthly savings With the default values, monthly savings is computed from the interaction of every input field — change any one of them and the result updates immediately, so you can stress-test different scenarios without re-entering the whole form. Adjust the inputs to match your real financial situation. The defaults are realistic starting points, but every person's circumstances differ — your actual income, expenses, rates, and timelines will produce a different answer. Use the tool iteratively: start with the defaults, then change one variable at a time to see which factor has the largest impact on your outcome.Formula
Monthly savings = Payment(old rate) - Payment(new rate) | Break-even = closing costs / monthly savings
Tips
- A break-even beyond your likely stay in the house means the refi never pays you back — skip it.
- Roll closing costs into the loan only if it does not worsen the payment math by much; otherwise pay upfront.
- Compare no-point quotes: a cut of 1% is meaningful; a cut of 0.25% rarely covers costs before a move.
- Cash-out refinancing is a different product — a bigger balance can erase the savings you see here.
Frequently asked questions
When does refinancing make sense?
When the new rate is at least 0.5-1% lower and you expect to stay past the break-even point. The break-even month — closing costs divided by monthly savings — is the number that decides; if you plan to move sooner, refinancing loses money even at a good rate.
What are typical closing costs on a refinance?
Roughly 2-5% of the loan amount: origination fees, appraisal, title insurance and points. Many lenders quote them as 'no-cost' but finance them into the rate — compare the true APR, which includes them.
Should I restart the 30-year term when refinancing?
Only if you want the lower payment. Restarting resets the amortization clock — interest is front-loaded again, so total interest can rise even as the payment falls. Compare a refi at your remaining term versus a new 30-year to see the real trade.
What is the difference between rate-and-term and cash-out refinancing?
Rate-and-term refis change the rate or term on the same balance — the clean comparison this calculator models. Cash-out refis borrow more than the outstanding balance to extract equity, which increases the loan and can negate the rate savings. Compare them separately, never in one number.