Refinance Calculator
- Current
- Refinanced
This refinance calculator compares your existing mortgage against a proposed new loan to reveal three decisive numbers: how much your monthly payment drops, how many months it takes to recoup the closing costs, and how much you save or lose across the full term. It rolls the closing costs into the new loan balance, recomputes both payments with the standard amortization formula, and surfaces a break-even point. Use it to judge whether refinancing actually pays off before you commit.
Formula
Break-even months = ⌈Closing costs ÷ (Current payment − New payment)⌉
- Current payment
- Monthly payment on the existing balance, rate, and term
- New payment
- Monthly payment on (balance + closing costs) at the new rate and term
- Closing costs
- Upfront refinancing fees, financed into the new loan
- Lifetime savings
- Current total cost (payment × months) minus new total cost
How it works
- Enter your Current Balance, then set the Current Rate slider and the Current Remaining Term (1-30 years) to describe the loan you have now.
- Set the New Rate and New Term sliders for the refinance offer, and enter the Closing Costs you would pay; the tool adds those costs to the balance financed on the new loan.
- It returns the current and new monthly payments, the monthly savings, a break-even in months (closing costs divided by monthly savings, rounded up), and the lifetime savings comparing total cost of both loans.
Worked example
A $300,000 balance at 7% with 30 years left, refinanced to 5% over 30 years with $5,000 in closing costs.
- Current payment on $300,000 at 7% / 30 yrs = $1,995.91.
- New loan = 300,000 + 5,000 = $305,000 at 5% / 30 yrs = $1,637.31 per month.
- Monthly savings = 1,995.91 − 1,637.31 = $358.60.
- Break-even = ceil(5,000 ÷ 358.60) = 14 months; lifetime savings = 718,526.69 − 589,430.14 = $129,096.55.
Payment falls about $358.60/mo, closing costs are recovered in 14 months, and lifetime savings are roughly $129,096.55.
Frequently asked questions
- How is the break-even point calculated?
- It divides your closing costs by your monthly savings and rounds up to whole months. After that many months of lower payments, the refinance has paid back its upfront cost; stay in the home past that point and you come out ahead.
- Are the closing costs added to my loan?
- Yes. This tool finances the closing costs into the new balance, so the new payment is computed on your current balance plus the costs. That is why a no-cash-out refinance still raises the principal slightly.
- Why might lifetime savings shrink if I extend the term?
- Resetting to a longer term lowers the monthly payment but stretches interest over more years. The lifetime-savings figure compares total cost of both loans, so a much longer new term can erode or even reverse the apparent monthly savings.
- Does this include points or taxes?
- Only the closing-cost amount you enter is counted, so include discount points there if you pay them. Property taxes, insurance, and PMI are not part of the comparison since they are largely unchanged by a refinance.