Mortgage Refinance Calculator
Compare your current mortgage against a new loan to see your monthly savings, break-even point, and total interest saved over the life of the loan.
Current Mortgage
New Loan
When Does Refinancing Make Sense?
Refinancing replaces your current mortgage with a new loan — ideally at a lower interest rate or better terms. Here's how to evaluate whether it's the right move.
The Break-Even Rule
The break-even point is how long it takes for your monthly savings to cover the upfront closing costs. Most financial experts suggest refinancing makes sense if you plan to stay in the home at least as long as the break-even period — and ideally 2× longer to fully benefit.
- Break-even under 2 years — Generally a clear win
- Break-even 2–5 years — Depends on how long you plan to stay
- Break-even over 5 years — Risky; consider a no-closing-cost refinance
Rate-and-Term vs. Cash-Out Refinance
Rate-and-term refinance — Lowers your rate or changes your loan length without pulling equity out. This is the scenario this calculator models.
Cash-out refinance — Borrows more than you owe, giving you cash for renovations, debt payoff, etc. Your new balance and payment will be higher.
The 1% Rule
A common rule of thumb is that refinancing makes sense when you can lower your rate by at least 1 percentage point. In reality, even a 0.5% drop can be worth it on large balances — use this calculator to know for sure.
Frequently Asked Questions
What are typical closing costs for a refinance?
Usually 2–5% of the loan amount, but can be negotiated. Common costs include origination fees, appraisal, title search, and recording fees. Some lenders offer "no-closing-cost" refinances that roll fees into the rate.
Should I restart at 30 years or keep the shorter term?
If you refinance a 25-year remaining loan back to 30 years, you lower your payment but pay more interest over time. Refinancing to a 15 or 20-year term often saves the most total interest, though the monthly payment may not decrease much.
Does refinancing hurt my credit score?
Yes, briefly — the hard inquiry and new account typically drop your score 5–15 points for a few months.
