Free refinance calculator
Calculate mortgage refinance savings — compare your current loan to a new offer and find the break-even month and total net savings, updated live, as you type.
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Results are estimates. Consult a professional.
How the refinance calculator works
A refinance replaces your existing mortgage with a new one — ideally at a lower rate, shorter term, or both. The calculator answers the two questions that matter most: how much does the new payment save each month, and how many months of savings does it take to recover the closing costs? The break-even point is the critical number: stay in the home past it and the refinance saves money; leave before it and you lose.
Where P is the new loan principal (your remaining balance), r is the new monthly interest rate (annual rate ÷ 12), and n is the number of payments on the new term. If you refinance a 30-year loan with 22 years remaining into a new 30-year loan, you are extending your term — factor that into the net savings calculation.
CFPB — Should I refinance my mortgage?Worked example: $280k balance, 7.5% → 6.75%
Taylor has $280,000 remaining on a 30-year mortgage at 7.5%. A lender offers a new 30-year loan at 6.75% with $4,000 in closing costs. Taylor wants to know whether it makes sense and how long it takes to break even.
Break-even months by closing costs and monthly savings
Break-even is simply closing costs divided by monthly savings. The table below covers the most common combinations. A break-even under 24 months is generally considered favorable for a refinance.
| Monthly Savings | $2,000 Closing | $4,000 Closing | $6,000 Closing | $8,000 Closing |
|---|---|---|---|---|
| $75 / mo | 27 mo | 53 mo | 80 mo | 107 mo |
| $125 / mo | 16 mo | 32 mo | 48 mo | 64 mo |
| $175 / mo | 11 mo | 23 mo | 34 mo | 46 mo |
| $250 / mo | 8 mo | 16 mo | 24 mo | 32 mo |
Source: CFPB refinancing guide. Break-even = closing costs ÷ monthly savings. Under 24 months is typically favorable.
Tips for deciding whether to refinance
Refinancing is worth doing when the numbers align — but the numbers must include your timeline, not just the rate. Here are five things to weigh before locking in.
- Aim for at least 0.75–1% rate reduction — Below that threshold, closing costs typically eat most of the savings. The bigger the balance and the larger the rate drop, the faster you break even.
- Match the new term to your plans — Refinancing into a new 30-year loan when you have 22 years remaining resets the clock and adds 8 years of interest payments. If you can afford a 20- or 15-year term, the total interest savings can be substantial.
- Roll closing costs into the loan with caution — A no-cost refinance sounds appealing, but the lender recoups the costs through a higher rate. You are still paying — just invisibly. Run the break-even on both scenarios.
- Check your credit before applying — Rates are tier-priced. A 720 credit score versus a 760 score can mean a 0.25–0.5% rate difference. If your score is borderline, spending a few months paying down cards may save more than the rate drop itself.
- Get at least three competing quotes on the same day — Mortgage rates move daily. Request Loan Estimates (the standard federal form) from multiple lenders on the same morning so you are comparing apples to apples.
Accuracy and limitations
The calculator assumes a fixed-rate refinance with constant monthly payments. It does not model cash-out refinances, ARM products, or the tax implications of changing your mortgage interest deduction. Break-even calculations assume you make no extra principal payments on either loan. Actual closing costs vary by lender, loan size, and state — get a Loan Estimate from your lender for precise figures.
Not financial advice — consult a real estate professional for your specific situation.
Refinance terms defined
About this refinance calculator
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