Refinance Calculator

Compare your current mortgage with a refinance offer to see how much you'd save each month, how long it takes to recover the closing costs, and the effect on total interest.

Typically 2–5% of the loan amount.

Monthly savings
$270.43
Break-even on closing costs
1 year 10 months
Current payment
$1,971.74
New payment
$1,701.31
Interest left on current loan
$358,844.79
Interest on new loan
$332,471.42
Lifetime savings (after costs)
$20,373.37
  • The new loan runs 3.0 years longer than your current one. A lower payment can still mean more total interest — compare the lifetime figure.

When refinancing makes sense

Refinancing replaces your mortgage with a new one, usually to get a lower rate, change the term, or switch from an adjustable to a fixed rate. It costs money — closing costs are commonly 2% to 5% of the loan — so the real question is whether the savings outweigh those costs within the time you'll keep the home.

The break-even point answers that: closing costs divided by monthly savings. If you'll stay in the home well past the break-even, refinancing likely pays off. If you might sell sooner, it may not.

Watch the term, not just the payment

Restarting a 30-year term on a loan you've already paid for years lowers the payment partly by stretching it out, which can mean paying more interest in total. Compare the lifetime figure, or choose a shorter new term (or keep paying your old amount) to keep the savings real.

Rolling closing costs into the loan avoids paying cash now but means paying interest on those costs for the life of the loan.

The calculations

Monthly savings = current payment − new paymentBreak-even (months) = closing costs ÷ monthly savingsLifetime difference = remaining current payments − (new payments + cash closing costs)

Example

  1. $280,000 left at 7.25% with 27 years to go: payment ≈ $1,971.74.
  2. Refinance to 6.125% over 30 years with $6,000 paid in cash: new payment ≈ $1,701.31.
  3. Savings of about $270 a month recover the $6,000 in roughly 22 months — but the new loan runs 3 years longer, so check the lifetime figure too.

Frequently asked questions

How much does the rate need to drop to make refinancing worth it?

There's no fixed rule. A smaller drop can pay off on a large loan with low closing costs; a bigger drop may not if you're moving soon. Use the break-even point and how long you'll stay.

Does refinancing affect my credit score?

Applying causes a hard inquiry and the new account lowers your average account age, usually a small, temporary dip. Rate-shopping several lenders within a short window generally counts as a single inquiry for mortgages.

What about a cash-out refinance?

A cash-out refinance borrows more than you owe and gives you the difference. Enter the larger new balance (by adding the cash to closing costs and choosing "added to the new loan") to see the effect on payments.

Sources

Last reviewed for 2026. How we calculate.