Refinance Calculator
Compare your current mortgage with a new rate using balance, remaining term, closing costs, and break-even timing.
| Mo | Old balance | New balance | Cumulative savings |
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How We Calculate This
Formula
Variables
- Both payments use the fixed-rate amortization formula.
- Total savings subtracts closing costs from interest savings.
- Balance comparison uses the same remaining term for both loans.
Sources CFPB refinance disclosures and standard mortgage amortization math.
How to Use the Refinance Results
A refinance replaces an existing loan with a new one. The usual goal is a lower rate, lower payment, shorter payoff, cash-out access, or some combination of those. The trade-off is closing cost. A lower payment is not automatically a good deal if it takes too long to recover the cost or if the new term quietly extends the debt for many extra years.
The key variables are current balance, remaining term, current rate, new rate, and closing costs. Current balance is what still needs to be repaid. Remaining term is how long the current loan has left. Current rate and new rate determine the payment difference. Closing costs include lender fees, title, recording, appraisal, points, and any other charges needed to close the refinance. This calculator compares the new rate over the same remaining term so the interest comparison stays clean.
Interpret monthly savings and break-even together. Monthly savings shows the cash-flow improvement. Break-even month shows how long you must keep the new loan before the payment savings recover closing costs. Total savings estimates lifetime interest savings after subtracting those costs. If the break-even month is beyond your likely move date, sale date, or next refinance window, the refinance may not be worth doing.
Watch the term carefully. Restarting a 30-year clock can make a refinance look attractive by lowering the payment while increasing total interest. If cash flow is the main problem, that may still be useful, but it should be an intentional choice. For a deeper checklist, read the refinance break-even guide, then compare lender Loan Estimates rather than only advertised rates.
Run stress cases before paying fees. Try a slightly higher new rate, higher closing costs, and a shorter expected holding period. If the refinance still saves money, the decision is more durable. If a small change erases the benefit, ask whether no-cost pricing, fewer points, or waiting for a larger rate move would be better. The strongest refinance is one where payment relief and lifetime savings both survive conservative assumptions.
Do not ignore points when comparing offers. Paying discount points can lower the rate and improve monthly savings, but points are just prepaid interest. They usually make sense only when you will keep the new loan long enough to recover the upfront cost. Ask each lender for a no-points quote and a points quote, then run both through the calculator. That separates true rate improvement from a trade of cash today for payment relief later.
Frequently Asked Questions
What is a refinance break-even month?
It is the number of months required for monthly savings to recover closing costs. If you sell or refinance again before that month, the refinance may not pay off.
Should I restart the loan term when refinancing?
Restarting a long term lowers the payment but may increase lifetime interest. This calculator compares the new rate over the same remaining term.
Do closing costs matter?
Yes. Closing costs reduce or eliminate savings, especially if the monthly payment difference is small.
What if the new payment is higher?
A higher payment may still make sense for a shorter term, but this tool will show no payment break-even when monthly savings are negative.