Refinance Calculator
Compare your current mortgage to a refinance scenario. See your new payment, monthly savings, total interest difference, and how long until closing costs pay for themselves.
How to read your result
- Monthly savings
- Cash flow improvement starting day one. Negative means the new payment is higher — only worth it if you're shortening the term.
- Break-even
- How long until savings repay closing costs. Refi only makes sense if you'll stay in the home well past this date.
- Lifetime savings
- Total interest saved minus closing costs. Negative means the refi loses money over the life of the loan even if monthly payment drops.
- New total interest
- Compare to current total interest. A new 30-yr after 5+ years on the current loan often raises lifetime interest despite a lower rate.
Recommended next steps
How it works
- 1Enter your current loan
Use the remaining balance, current rate, and years still left.
- 2Enter the refinance offer
Add the new rate, new term, and estimated closing costs.
- 3Check your break-even point
If you'll stay in the home longer than the break-even, refinancing wins.
Mortgage refinancing replaces your existing loan with a new one — typically at a lower rate, a different term, or both. The decision comes down to three numbers: how much you save per month, how much it costs to refinance, and how long you'll stay in the home.
The break-even point is the most important refinance metric. If a refinance costs $6,000 in closing costs and saves $200/month, your break-even is 30 months. You need to stay in the home for at least 30 months to come out ahead.
Beware of refinancing into a fresh 30-year term if you're already several years into your current mortgage. Even at a lower rate, restarting the clock often costs more in total interest. Consider refinancing into a shorter term that matches your remaining payoff timeline.
Common rules of thumb: aim for at least 0.5–0.75% rate reduction, recoup closing costs within 24–36 months, and avoid refinancing if you might sell within 2 years.
Example scenarios
If you save $250/mo, break-even is 24 months.
Save ~$200/mo, break-even ~40 months.
Adds debt; only worth it for high-return use of cash like debt consolidation or value-adding renovations.
What affects your result?
0.5% is the rough minimum to bother; below that, closing costs usually eat the savings unless you're staying 7+ years.
Vary from 2–5% of the loan. 'No-cost' refis just roll fees into the rate — compare break-even either way.
If you'll sell within 2 years, refinancing almost never wins. 5+ years is the sweet spot.
Refinancing 8 years into a 30-year loan and restarting at 30 years adds nearly a decade of payments — match the new term to your remaining payoff.
Common mistakes to avoid
- Comparing only the monthly payment — a lower payment from a longer term often costs more in total interest.
- Ignoring closing costs because the lender 'rolls them in' — they're still real costs being financed at the new rate.
- Refinancing for a tiny rate drop right before selling — break-even may be after you've already moved.
- Taking cash out to cover lifestyle spending — you're converting unsecured budget pressure into 30-year secured debt.
- Not checking PMI implications — if you refinance below 80% LTV you may drop PMI; above, you may add it back.
Common questions
When does refinancing make sense?
Refinancing usually pays off when the new rate is at least 0.5–0.75% lower than your current rate AND you plan to stay in the home long enough to recoup the closing costs (the break-even point).
What is the break-even point?
It's the number of months it takes for your monthly savings to equal the closing costs of the refinance. If your break-even is 36 months and you'll sell in 2 years, refinancing loses money.
What are typical refinance closing costs?
Refinance closing costs are usually 2%–5% of the loan amount, covering appraisal, title, origination, and recording fees. A $300,000 refinance might cost $6,000–$15,000.
Does refinancing restart my loan term?
Yes — a new 30-year refinance restarts the clock at 30 years. If you've already paid 8 years on your current mortgage, consider a 20- or 22-year term instead to avoid lengthening total interest paid.
How do I calculate refinance savings?
Monthly savings = current payment − new payment. Lifetime savings = (current total interest − new total interest) − closing costs. Break-even months = closing costs ÷ monthly savings. This calculator does all three automatically.
Is a no-closing-cost refinance really free?
No — 'no-cost' refinances roll the closing costs into either the loan balance or a slightly higher rate (usually ~0.25–0.5% higher). The fees still exist; they're just amortized. Compare break-even with vs without rolling fees in.
Can I refinance with bad credit?
Possible but pricey. Below a 620 FICO, conventional refinances become hard. FHA streamline refinances are easier (no income or appraisal sometimes required) but you'll still pay MIP. Improving credit by 40+ points first usually beats refinancing at a bad rate.
How much equity do I need to refinance?
Most conventional refinances require at least 20% equity to avoid PMI. With less equity you can still refinance but you'll pay PMI on the new loan (or use an FHA streamline). Cash-out refinances typically require 20–30% equity.
Should I refinance from a 30-year to a 15-year?
Strong move if you can afford the higher payment — you'll typically get a 0.25–0.5% lower rate and cut total interest by 50–60%. But the monthly payment jumps ~50%, so confirm cash flow before committing.
What's a cash-out refinance?
You refinance for more than you currently owe and take the difference in cash, secured by your home at mortgage rates. Useful for high-return uses (debt consolidation, value-adding renovations); risky for lifestyle spending.
Does refinancing hurt my credit score?
Temporarily, yes — the hard inquiry and new account drop scores by ~5–15 points for a few months. Multiple rate shop inquiries within 14–45 days count as one for FICO purposes, so shop lenders in a tight window.
When is the worst time to refinance?
Within 2 years of selling (break-even won't hit), if rates are within 0.25% of yours (savings won't cover costs), or in the first 6 months of your existing mortgage (lender penalties may apply). Avoid refinancing while planning a job change that affects underwriting.