Refinance Calculator
Compare your current mortgage side by side with a refinance option. See exactly how much you save monthly, how many months until closing costs are recovered (break-even point), and whether the refinance saves or costs you money over the full life of the loan. Add cash-out amounts and closing costs for a complete picture.
Current Loan
New Loan
You might also need
How It Works
The calculator compares your current monthly P&I payment against the new loan payment. The difference is your monthly savings. Even a small rate reduction can save hundreds per month on large balances.
Savings = Current Payment - New Payment$1,996/mo at 7% → $1,634/mo at 5.75% = $362 savedDivide total closing costs by the monthly savings. This tells you how many months until the refinance pays for itself. If you move before break-even, the refinance costs you money.
Break-Even = Closing Costs / Monthly Savings$6,000 costs / $362 savings = 17 monthsCompare total remaining cost on the current loan versus total cost of the new loan including closing costs. This shows the true bottom-line impact of the refinance over the full term.
Savings = (Current Pmt x Remaining Mo) - (New Pmt x New Term Mo)($1,996 x 300) - ($1,634 x 360) = $10,560 savedCash-out adds to the new loan balance, increasing the monthly payment. The calculator includes cash-out in the new loan amount to show the complete payment and total cost impact.
New Loan = Current Balance + Closing Costs + Cash-Out$280K + $6K costs + $30K cash-out = $316K new loanEach percentage point of rate reduction saves approximately $60 to $70 per month per $100,000 of loan balance on a 30-year mortgage. The calculator shows the exact savings for your specific numbers.
~$65/mo per $100K per 1% rate drop$280K loan, 1% rate drop ≈ $182/mo savingsRefinancing to a shorter term increases the payment but drastically reduces total interest. The calculator shows both options so you can weigh monthly cash flow against long-term savings.
Compare same balance at different terms$280K at 5.75%: 30yr = $1,634/mo vs 15yr = $2,328/moQuick Reference
Common examples — verify instantly above.
7% → 5.75%
$280K, 30yr refi
$362 saved/mo
Break-even
$6K costs, $362/mo savings
17 months
6.5% → 5.5%
$300K, 30yr refi
$186 saved/mo
$280K, 15yr refi
At 5.5%
$2,289/mo (saves $165K total)
$30K cash-out
$280K + $30K at 5.75%
$1,809/mo
Lifetime savings
$280K, 7%→5.75%, 30yr
~$10,560 saved
Rate drop value
1% reduction per $100K
~$65/mo savings
30yr → 15yr
$280K at 5.75%
+$694/mo, saves $210K interest
Tips & Shortcuts
Calculate the break-even point before refinancing. If you plan to move within 3 years and break-even is 24 months, the refinance barely pays off after accounting for the hassle.
Compare a 15-year refinance against a 30-year with extra payments. The 15-year guarantees the faster payoff, but a 30-year with voluntary extra payments gives more flexibility.
Shop multiple lenders for refinance rates and closing costs. The difference between lenders can be 0.25% to 0.50% in rate and thousands in fees.
Consider a no-closing-cost refinance if you might move soon. The slightly higher rate is worth it if you avoid paying $5,000 to $10,000 in closing costs that you might not recoup.
Do not extend the term unnecessarily. If you have 20 years left, consider a 20-year refinance instead of a 30-year to avoid adding 10 years of payments.
Factor in the time value of money. Monthly savings invested at a reasonable return add up over time, making the break-even point effectively shorter than the simple calculation suggests.
Common Mistakes to Avoid
Refinancing repeatedly and paying closing costs each time
Multiple refinances compound closing costs. Each refinance typically costs 2% to 5% of the loan. Three refinances on a $280K loan could cost $17,000 to $42,000 in fees alone.
Focusing only on the rate drop without considering the new term
Dropping from 7% to 5.75% looks great, but if you restart a 30-year term with 20 years remaining on the current loan, you add 10 years of payments that may offset the rate savings.
Cash-out refinancing for depreciating assets or consumption
Using cash-out to consolidate credit card debt feels helpful but puts your home at risk for spending you already did. Use cash-out only for value-adding investments like home improvements.
Not including all closing costs in the break-even calculation
Include every cost: appraisal, title insurance, origination fees, recording fees, and any points paid. Missing costs makes the break-even look shorter than it actually is.
Assuming your current payment stays the same for comparison
If you are already making extra payments on the current loan, compare against the standard payment. Extra payments on the old loan also save interest and should be factored into the comparison.
Ignoring the escrow account reset
When you refinance, the old escrow account is refunded and a new one is established. This can require additional cash at closing for the new escrow cushion, increasing the effective closing cost.
Frequently Asked Questions
Refinancing typically makes sense when you can reduce your interest rate by at least 0.5% to 1%, plan to stay in the home long enough to pass the break-even point, and the closing costs are reasonable relative to the monthly savings.
The break-even point is the number of months it takes for the cumulative monthly savings to equal the closing costs. If closing costs are $5,000 and you save $200 per month, break-even is 25 months. You must stay in the home past this point to benefit.
Closing costs for a refinance typically range from 2% to 5% of the loan amount. On a $280,000 loan, expect $5,600 to $14,000. These include appraisal, title insurance, origination fees, and other charges.
Refinancing from a 30-year to a 15-year mortgage increases the monthly payment but dramatically reduces total interest. If you can afford the higher payment, the total savings can be tens of thousands of dollars.
Cash-out refinancing replaces your current mortgage with a larger one, giving you the difference in cash. For example, refinancing a $250,000 balance into a $300,000 loan gives you $50,000 cash. The new loan has a higher balance and potentially a different rate.
Yes. A 30-year refinance starts a new 30-year term. If you have 20 years left on your current mortgage and refinance into a new 30-year loan, you extend the total payment period by 10 years, which can increase total interest even with a lower rate.
Related Calculators
FHA Loan Calculator
FHA monthly payment including MIP and lower down payment.
VA Mortgage Calculator
VA loan payment with no PMI and zero down payment option.
Energy Cost Calculator
Calculate annual energy cost and savings from efficiency changes.
Circuit Breaker Calculator
Find the right circuit breaker size for any load.
Auto Loan Calculator
Calculate car loan payment, total cost, and interest.
Payment Calculator
Find monthly payment for any loan amount and term.