🔄 Refinance Calculator
Compare your current mortgage with a new one and find the month the refinance starts paying for itself.
How it works
Both loans are priced with the same payment formula — payment = balance × r ÷ (1 − (1+r)−months) — one with your current rate and the time left on it, one with the new rate and term. The monthly saving is the gap between the two payments. Break-even is the closing costs divided by that saving: how many months it takes for the refinance to pay for itself. Lifetime interest saved compares the interest left on your current loan with the interest on the new one.
An example
On a $240,000 balance at 8% with 25 years left, the payment is $1,852.36. Refinance that balance at 6% over a fresh 30 years and it drops to $1,438.92 — a saving of $413.44 a month. With $4,000 of closing costs, break-even arrives after 9.7 months, and the new loan carries $37,696.02 less interest over its life. One caution: stretching the term back out to 30 years is part of why the payment falls, so the deal holds up best if you stay in the home well past the break-even month.
Common questions
When does refinancing make sense?
When you expect to stay in the home longer than the break-even point and the new rate is meaningfully lower. If you might move within a year or two, the closing costs can eat the saving before you see any benefit.
How can a lower rate still mean more interest overall?
Because the clock restarts. A fresh 30-year term spreads the balance over many more months, so the total interest can end up higher even at a lower rate. Comparing the new loan against the same remaining term as your current one keeps the comparison honest.
What counts as closing costs?
Lender fees, the appraisal, title and recording charges — typically 2% to 5% of the loan amount. Some offers roll the costs into the balance instead of charging upfront; that raises the new loan, so check which way your quote does it.
Related calculators
This calculator gives estimates for learning. Rates, taxes and rules change, and your lender or the IRS has the final numbers — check big decisions against the real documents.