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Refinance Calculator
A lower rate means nothing until you outlast the closing costs. This mortgage refinance calculator leads with the month you break even, then your monthly savings and the true lifetime interest change.
See how this works on a $300,000 refinance — 3 real examples
You break even on closing costs
—
Current payment
$0
New payment
$0
Monthly savings
$0
Lifetime savings (after costs)
$0
When your savings cover the costs
Compare 15-, 20- and 30-year refinance terms
Same balance and new rate, different terms. Shorter terms raise the payment but usually win on lifetime savings; your selected term is highlighted.
| New term | New payment | Monthly savings | Break-even | Lifetime savings |
|---|
Year by year: current loan vs. refinanceInterest & balance, side by side
| Year | Current-loan interest | New-loan interest | Current balance | New balance |
|---|
How your mortgage refinance is calculated
Both payments come from the standard amortization formula on your remaining balance B, with r the monthly rate (annual % ÷ 12) and n the number of months:
M = B · r / (1 − (1 + r)−n)
monthly savings = Mold − Mnew
break-even month = ⌈ closing costs / monthly savings ⌉
lifetime savings = old remaining interest − new total interest − closing costs
Mold is rebuilt from your balance, current rate and remaining months, so it can differ slightly from your statement payment (which may include escrow or original-loan rounding). Assumptions worth knowing: this is a rate-and-term refinance — the new loan equals your current balance, with no cash-out; closing costs are paid out of pocket, not financed; and figures are principal and interest only, since taxes and insurance don’t change when you refinance. The break-even month compares payments, so a stretched term can look great monthly while costing more over its life — that’s exactly why the lifetime savings figure counts only the interest left on your old loan against all interest on the new one, minus costs. If the new payment isn’t lower, the break-even month is shown as “never.”
One rate cut, three very different deals
The same $300,000 drops from 7% to 5.75% for $6,000 in closing costs; the length of the new loan decides everything else.
The cash-flow play: a fresh 30 years
per month$1,750.72
- The payment falls $312.73 a month, the deepest cut any of these terms can offer.
- At that pace the $6,000 closing bill is recovered by month 20, sooner than either shorter term.
- Stretching 27 remaining years back out to 30 caps the lifetime interest saving at $32,297.
The fastest payback and the easiest month — and by far the smallest prize at the end.
Load this example (opens in a new tab)The middle path: a new 25 years
per month$1,887.32
- Savings of $176.13 a month land in between — a bit more than half of what the 30-year frees up.
- Smaller savings take longer to swallow the same $6,000, so break-even waits until month 35.
- In exchange, the lifetime interest saving nearly triples, to $96,360.
Slower relief, slower payback, and a finish worth nearly three times as much.
Load this example (opens in a new tab)The expensive shortcut: 15 years
per month$2,491.23
- This one moves the payment the other way: $427.79 a month more than the loan it replaces.
- Measured in monthly savings it never breaks even, because there are no monthly savings to count.
- The prize is $214,135 in lifetime interest saved — more than six times the 30-year figure.
More out of pocket every single month, and $214,135 less interest over the whole run.
Load this example (opens in a new tab)Illustrations only, not financial advice. Your own rate, taxes and insurance will differ — check with a qualified financial advisor before acting on any of this.
The refinance decision, in plain English
- Break-even is the whole game. It’s the month your accumulated savings repay the closing costs — $6,000 at $313/mo saved is month 20. Before it you’re underwater; after it, every month is gain.
- Will you still own the loan then? If you’ll sell or refinance again before break-even, even a much lower rate loses money — this calculator warns you when your plan-to-stay falls short.
- Beware the term reset. Refinancing 27 remaining years into a fresh 30-year term can raise lifetime interest even at a lower rate; the lifetime-savings figure nets that out.
- Shorter terms usually win. A 15- or 20-year refi costs more monthly but far less over its life, and the break-even month barely moves — compare them in the table above.
- Shop and scrutinize costs. Quotes move daily, so compare at least three lenders’ Loan Estimates the same day; “no-cost” refinances just bury the fees in a higher rate.
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Frequently asked questions
Should I refinance my mortgage?
A refinance usually makes sense when three things line up: the new rate is meaningfully lower (often at least 0.5–1 percentage point), you will keep the loan well past the break-even month, and the new term doesn’t quietly add years of interest. If the break-even month above lands comfortably before you plan to move and the lifetime savings figure is positive, refinancing is worth pursuing.
What is the break-even point on a refinance?
It is the month when your accumulated monthly savings equal the closing costs you paid. For example, $6,000 in closing costs divided by $300 of monthly savings is 20 months. Stay in the loan longer than that and every month afterward is pure gain; sell or refinance again earlier and the deal loses money.
How much does it cost to refinance?
Closing costs typically run 2–6% of the loan amount — roughly $6,000 to $18,000 on a $300,000 balance — covering lender origination, appraisal, title insurance and recording fees. “No-closing-cost” refinances don’t erase the fees; they roll them into a higher rate or a bigger balance, so you still pay them over time.
Does refinancing reset my loan term?
Yes, unless you deliberately pick a shorter term. Refinancing 27 remaining years into a new 30-year loan adds three years of payments, which can raise total interest even at a lower rate. The lifetime savings figure in this calculator accounts for that reset, and the term comparison table lets you compare a 15-year mortgage refinance against 20- and 30-year options side by side.
What is a cash-out refinance?
A cash-out refinance replaces your loan with a larger one and hands you the difference in cash. It raises your balance and loan-to-value ratio, can trigger PMI above 80% LTV, and usually carries a slightly higher rate. This calculator models a rate-and-term refinance, where the new loan equals your current balance.
How much can refinancing save me?
Dropping a $300,000 balance from 7% to 5.75% on a 30-year term cuts the payment by about $313 a month — roughly $3,800 a year. Lifetime savings depend on the term you choose and the closing costs you pay; the lifetime savings tile above nets everything, including costs, over the full life of each loan.
Disclaimer: these calculators are educational tools, not financial advice. They model your inputs with published formulas, but they cannot know your full situation — for decisions with real stakes, talk to a qualified professional. Formulas and defaults last reviewed .