What the refinance calculator does
This refinance calculator shows you what happens when you swap your current loan for a new one. Put in your numbers and you'll see your new monthly payment, how much you save each month, and the point where those savings finally cover what the refinance cost you. That last number is the one that matters most. A lower rate looks great, but if you move or sell before you break even, refinancing can quietly cost you money instead of saving it.
Enter your current loan
Type in your current balance, your interest rate, and how many years you have left. You'll find all of this on your latest statement.
Add the new loan terms
Enter the rate you've been quoted and the term you want, usually 15 or 30 years. Even a one point drop in rate changes the math a lot.
Add your closing costs
Put in what the lender charges to refinance, such as appraisal, origination, title, and recording fees. This often runs 2% to 5% of the loan amount.
Read your results
The calculator gives you your new payment, your monthly savings, and your break-even month. Compare that break-even date to how long you actually plan to stay.
How the math works
The break-even point is simple division. You take what the refinance costs you and divide it by how much you save each month.
Break-even months = closing costs ÷ monthly savings
Say you owe $250,000 at 7.25%, and your payment is about $1,705 a month. You refinance into a new 30-year loan at 6.25%, which drops the payment to roughly $1,539. That's $166 saved every month.
Your lender charges $5,000 in closing costs. Divide that by your savings:
$5,000 ÷ $166 = about 30 months
So it takes a little over two years to come out ahead. Stay in the home past month 30 and every dollar you save after that is yours to keep.
Costs and factors to plan for
The rate is only part of the story. A few things can push your break-even date in either direction.
Closing costs. These are the fees you have to earn back. Ask your lender for a written estimate so the calculator reflects real numbers, not a guess.
Loan term. Stretching a loan back out to 30 years lowers your payment but can raise the total interest you pay over the life of the loan. A shorter term costs more each month and saves more in the long run.
Cash-out. If you borrow extra against your equity, your new balance climbs and so does your payment. Run that version on its own.
How long you'll stay. This is the deciding factor. If a move is likely before you break even, refinancing rarely pays off.
Tips before you refinance
Get quotes from at least three lenders in the same week. Rates move, and a small gap adds up over the years.
Watch for a longer term hiding a higher total cost. A lower payment isn't always a cheaper loan.
Check your credit before you apply. A higher FICO score (the range runs 300 to 850) usually earns you a better rate.
Ask whether the closing costs are paid upfront or rolled into the loan. Rolling them in raises your balance and pushes your break-even date later.
Don't refinance just to skip a payment or two. The fees almost always outweigh the short break.
Refinance calculator FAQ
What is a good break-even point for a refinance?
There's no single right answer, but many people aim to break even within two to three years. The real test is whether you'll stay in the home long enough to pass that point. If you plan to move sooner, the refinance probably isn't worth it.
How much does it cost to refinance a mortgage?
Closing costs usually run about 2% to 5% of the loan amount. On a $250,000 loan, that's roughly $5,000 to $12,500. Your lender's written estimate gives you the exact figure to plug in here.
Does refinancing hurt my credit score?
Applying triggers a hard inquiry, which can drop your score a few points for a short while. If you shop several lenders within about 45 days, the credit bureaus usually count it as a single inquiry. For most people the dip is small and fades quickly.
Should I refinance to a shorter term?
Moving from a 30-year to a 15-year loan often comes with a lower rate and saves a lot of interest overall. The trade-off is a higher monthly payment. Use the calculator to check that the new payment fits your budget before you commit.
Can I refinance with no closing costs?
Some lenders advertise a 'no closing cost' refinance, but the fees don't disappear. They're either rolled into your loan balance or paid back through a slightly higher rate. Set closing costs to zero only if your lender truly charges nothing upfront, and remember you may pay more over the life of the loan.
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