Mortgage Refinance Calculator

Should you refinance your mortgage?

Refinancing replaces your current mortgage with a new one — usually to get a lower interest rate, a shorter term, or a lower monthly payment. It only makes sense if the savings outweigh the cost of doing it. This calculator compares your current and new payments, shows your monthly saving, and — most importantly — tells you the break-even point: how long it takes for the savings to repay the closing costs.

The break-even point

Refinancing isn't free. Closing costs typically run 2–5% of the loan amount. The break-even point is closing costs ÷ monthly savings — the number of months until you've saved back what the refinance cost. If you plan to stay in the home well past the break-even point, refinancing pays off. If you might move or sell before then, it usually doesn't.

Lower payment vs. less interest

A lower monthly payment feels like a win, but watch the lifetime-interest figure. If you refinance a loan with 27 years left into a fresh 30-year term, you stretch the balance over more years — so even at a lower rate you can end up paying more total interest. The calculator flags this. To save on both fronts, refinance into a term equal to or shorter than the years you have left.

How to use this calculator

• Current balance — what you still owe, not the original loan amount.
• Current rate & years left — your existing loan's terms.
• New rate & term — the offer you're considering.
• Closing costs — lender and third-party fees for the new loan.

FAQ

What's a good reason to refinance into a longer term?

If your priority is freeing up monthly cash flow rather than minimizing total interest, a longer term lowers the payment. Just go in knowing it can cost more interest over the full loan.

Does this include taxes and insurance?

No — it compares principal and interest only, since those are what the rate and term change. Your escrow for taxes and insurance carries over and isn't affected by the refinance rate.

Is a "no-closing-cost" refinance really free?

Not usually. The costs are typically rolled into the loan balance or a slightly higher rate, so you still pay — just over time. Enter the true costs here for an honest break-even.