Monthly Impact
You save $0.00 per month
Difference in your monthly principal and interest payment
Mortgage Refinance Calculator
Run your current mortgage against a new offer to see your real monthly savings, your closing-cost break-even point, and how much interest you'll actually save without handing over your email or phone number.
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What you still owe today
$
Typically 2–5% of the loan amount — use your Loan Estimate. Leave blank for $0
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Annual interest rate on your current mortgage
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Annual interest rate quoted for the new loan
Years left until your existing loan is paid off
Length of the new replacement mortgage
Enter your current loan balance and interest rates above to compare your payments and see your break-even timeline.
How to Use This Calculator
Refinancing makes sense only when monthly payment savings outrun what you pay in upfront bank fees. Here's how to run your numbers:
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1
Grab your current statement details
Log into your mortgage portal or look at last month's statement. You'll need your exact unpaid balance, your current interest rate, and how many years remain on the note.
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2
Plug in the quote you just received
Type the annual rate your new lender quoted and pick your new term from the dropdown. Keep it at 30 years to maximize payment drop, or choose 15 to clear debt faster.
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3
Enter what the lender wants upfront
Check page 1 of your Loan Estimate under "Estimated Closing Costs" and enter that figure. If it's a zero-cost refi, leave it blank—the calculator treats it as zero.
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Compare your payments and your clock
The results update as you type, showing both payments side by side. If you plan to move before hitting that break-even month, skip the refinance.
The Formula
Both loans calculate monthly principal and interest with the standard amortization formula:
Monthly Payment (M) = B × [ r(1 + r)^n ] ÷ [ (1 + r)^n − 1 ]
Monthly Savings = Current Payment − New Payment
Break-Even Point (Months) = Math.ceil( Closing Costs ÷ Monthly Savings )
Lifetime Interest = (Monthly Payment × n) − B
Lifetime Interest Saved = Current Remaining Interest − New Total Interest
Here's what each variable stands for:
- B (Balance) The unpaid principal balance on your mortgage right now. A straightforward rate-and-term refinance swaps this exact amount into a fresh note.
- r (Monthly Rate) Your annual interest rate divided by 12, then divided by 100 to get the monthly decimal.
- n (Total Months) How many months of payments are left on the loan (years left multiplied by 12).
- Closing Costs The out-of-pocket fees to get the new loan done, like appraisal, title insurance, and lender origination charges.
- Break-Even Point The exact month where your cumulative monthly savings cancel out the closing costs you paid on day one.
Paying upfront vs. rolling costs into the loan: This tool assumes you pay closing costs on closing day. If you roll those fees into the balance instead, your monthly payment rises and you'll pay interest on the fees for decades.
Example
Let's run through a realistic scenario with actual numbers: say you owe $300,000 on a 30-year fixed mortgage at 7.0% with 30 years left to pay. A lender quotes you a new 30-year note at 5.5% with $6,000 in closing fees.
Current Loan Balance:
$300,000.00
Current Monthly Payment (7.0%):
$1,995.91
New Monthly Payment (5.5%):
$1,703.37
Monthly Payment Savings:
$292.54 / month
Upfront Closing Costs:
$6,000.00
Break-Even Point:
21 months (1 yr, 9 mo)
Dividing your $6,000 in closing costs by the $292.54 you save each month gives 20.51 months. Lenders collect full monthly installments, so you reach full break-even in month 21—roughly 1 year and 9 months after closing.
Here is how the lifetime interest stacks up over the full 30-year term:
- Interest remaining on your 7.0% loan: $418,528 ($1,995.91 × 360 − $300,000).
- Interest owed on your new 5.5% loan: $313,213 ($1,703.37 × 360 − $300,000).
- Lifetime interest saved: $105,315.
Subtracting that $6,000 closing fee leaves you with about $99,315 in net lifetime savings. If you stay in the house past month 21, the math is a no-brainer. When I look at numbers like this while planning ahead, I always wonder: For me it'd be the years, not the dollars — I'd rather sleep on a higher payment and own the place fifteen years sooner than chase a smaller monthly number.
Frequently Asked Questions
What is the break-even point on a refinance?
It's the month where your accumulated monthly savings equal the upfront closing fees you paid. Before that month, you're in the red; after it, every dollar saved stays in your budget. The break-even month gets my attention first — it's the number that tells me whether the deal is real or just a sales pitch with extra steps.
How much are closing costs when refinancing?
Most refis cost between 2% and 5% of the loan balance in closing fees. That covers the appraisal, title search, insurance, and lender origination fees. By federal law, lenders must give you an official Loan Estimate within three business days showing every single fee.
Is refinancing worth it if my payment barely drops?
If you're only saving twenty or thirty dollars a month, recovering thousands in fees takes years. Sell or move before reaching that break-even date and you lose money. This tool flags that risk if the break-even timeline outlasts your loan term.
Should I refinance into a shorter term?
Dropping from 30 years to 15 years usually raises your monthly bill because you have half the time to repay principal. The upside is huge interest savings and being mortgage-free fifteen years sooner. Our tool calculates this exact trade-off when your new payment goes up.
Does refinancing restart my loan clock?
Yes, a new 30-year mortgage resets your amortization clock back to month one. Early on, your payments go almost entirely toward interest instead of principal. That's why you have to compare lifetime interest savings here, not just the monthly payment drop.