Refinance calculator
Updated Updated for 2026 tax law
Compare your current mortgage with a refinance: new payment, monthly savings, how many months it takes to earn back closing costs, and whether you come out ahead over the life of the loan.
- Interest left on current loan
- $358,84727 yrs
- Interest on new loan
- $340,64230 yrs
- Net-worth break-even
- 27 monthsPayments made + balance still owed on each path
| After 2 years | −$491 |
| After 5 years | +$7,338 |
| After 7 years | +$12,185 |
| After 10 years | +$18,713 |
| After 15 years | +$26,795 |
The new loan runs 3 yrs longer than what's left on your current one. Lower payments partly come from stretching the debt — compare the lifetime cost, or keep paying your old amount to finish on time.
Principal and interest only (taxes and insurance don't change with a refinance). Assumes you keep the loan to term; selling or refinancing again earlier changes the math.
How to use the refinance calculator
- Enter your current balance, rate and years left (from your latest mortgage statement).
- Enter the new rate and term from a lender quote, and the closing costs including any points.
- Choose whether you'll pay costs in cash or add them to the loan, and add any cash-out amount.
- Read the break-even months, monthly savings and lifetime cost difference.
How break-even is calculated
Break-even (months) = closing costs ÷ monthly savings
Lifetime difference = remaining current payments − (new payments + upfront costs)
Net-worth break-even = first month where (payments made + balance owed) is lower on the new loan
Example: $280,000 left at 7.25% with 27 years to go is $1,971.74 a month. A 30-year refinance at 6.25% is $1,724.01, saving $247.73. With $6,000 of closing costs, the simple break-even is 25 months; counting how fast each loan's balance falls, you're ahead after 27 months.
Break-even by rate drop
| Rate drop | New rate | Monthly savings | Break-even |
|---|---|---|---|
| 0.5 pt | 7% | $142.69 | 53 months |
| 0.75 pt | 6.75% | $192.81 | 39 months |
| 1 pt | 6.5% | $242.40 | 31 months |
| 1.5 pt | 6% | $339.95 | 23 months |
| 2 pt | 5.5% | $435.23 | 18 months |
Things that change the answer
- How long you'll stay. If you might sell or refinance again before break-even, you lose money.
- Term reset. A new 30-year loan lowers the payment partly by stretching the debt. Keep paying your old amount, or pick a shorter term, to avoid paying more in total.
- Points. Paying points buys a lower rate for more cash upfront; include them in closing costs.
- PMI and escrow. If your home has gained value, a refinance can also remove PMI; escrow deposits at closing aren't a cost, since they're your money.
Disclaimer: Estimates for information only — not financial, lending or legal advice. Your lender's Loan Estimate and disclosures are the binding numbers. Principal and interest only. Closing costs, rates and eligibility depend on your credit, equity and lender.
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Frequently asked questions
How do I calculate the refinance break-even point?
Divide your closing costs by your monthly payment savings. Refinancing $280,000 from 7.25% to 6.25% saves $247.73 a month; with $6,000 of costs, break-even is 6,000 ÷ 247.73 ≈ 25 months.
When is refinancing worth it?
When you'll keep the loan well past the break-even point and the lifetime cost — all remaining payments plus closing costs — is lower than staying put. A rate drop of about 0.75–1 percentage point is a common rule of thumb, but the break-even math matters more.
Does refinancing restart my loan?
It can. Going from 27 years left back to 30 extends your debt; part of the lower payment comes from stretching it out. In our example, the 30-year refinance has a lifetime saving of $12,205, while a 25-year refinance saves $78,723.
Should I roll closing costs into the loan?
It avoids paying cash upfront, but you'll pay interest on those costs for the life of the loan, and your new balance will be higher. The calculator shows both options.
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Estimates for information only — not tax, legal or financial advice.