Mortgage Refinance Calculator

Refinancing replaces one mortgage with another, usually to get a lower rate, a different term, or to take equity out. The decision looks obvious when the new rate is well below the old one, but it is not, because refinancing costs money and restarts the clock. The only question that matters is whether the savings outlast the cost while you still own the home. The break-even point is the clearest way to judge it. Divide the closing costs by the monthly saving and you get the number of months before the refinance has paid for itself. A four-thousand-dollar cost against a hundred-dollar monthly saving breaks even in forty months; if you might move before then, refinancing loses money. Most rules of thumb suggest planning to stay at least two to three years past break-even to make it worthwhile. Watch the term as closely as the rate. Refinancing a loan with twenty years left into a fresh thirty-year term can lower the payment while costing far more interest overall, because you spread the balance over more years. To compare fairly, look at the lifetime interest figure for both loans, not just the monthly difference. Some borrowers take a shorter term to pay off sooner and pay more each month by choice. Closing costs are rarely zero. Bank fees, title, appraisal and recording charges add up, and points to buy down the rate are paid upfront. A no-cost refinance usually means the costs are folded into a slightly higher rate or a larger balance, so the money still leaves your pocket, just later and less visibly. Ask for a loan estimate and compare the total cost, not the headline rate alone. This calculator compares your current loan against a proposed refinance on the same balance, showing the payment change, the break-even month and the lifetime interest difference. It assumes the new loan covers the existing balance plus costs and ignores tax treatment and escrow changes, so use it as a starting point and confirm the final figures with your lender.

This calculator returns estimates for general information only. It is not financial, investment, tax or legal advice, and it cannot replace guidance from a qualified professional who knows your circumstances. Figures such as loan payments, investment growth and retirement projections are simplified models based on the inputs and assumptions you provide, not guarantees of future results.