Refinance Calculator
Current Loan
Range: 1 - 360
New Loan
Range: 10 - 30
Refinancing makes sense!
You could save $14,074.30 over the life of the loan.
Current Monthly Payment
$1,766.95
New Monthly Payment
$1,419.47
Monthly Savings
$347.48
Break-Even Point
15 months
1.3 years
Total Current Cost
$530,084.40
300 payments remaining
Total New Cost
$516,010.10
Including $5,000.00 closing costs
Cost Comparison
About the Refinance Calculator
A Refinance Calculator helps you decide whether replacing your current mortgage or loan with a new one actually saves money. You enter your existing loan's balance, current monthly payment or rate, and remaining term, then the proposed new rate, term, and any closing costs. The tool compares the two scenarios side by side, showing the new monthly payment, the monthly savings, the total interest under each option, and the break-even point where accumulated savings offset the upfront refinancing fees.
The break-even calculation is the heart of refinancing: it divides the total closing costs by the monthly savings to estimate how many months you must keep the new loan before the refinance pays for itself. If you plan to sell or move before reaching break-even, refinancing may cost more than it saves even with a lower rate. The calculator also surfaces a subtler trap, where resetting a 30-year loan back to a fresh 30-year term can increase lifetime interest despite a lower monthly payment.
Common use cases include lowering the interest rate when market rates drop, shortening the term to pay off the loan faster, switching from an adjustable to a fixed rate, or tapping equity with a cash-out refinance. It pairs naturally with a Mortgage Calculator for modeling the original loan and an Amortization Calculator to see how the new schedule front-loads interest all over again.
A practical tip is to compare total interest paid, not just the monthly payment, because a smaller payment achieved by extending the term can quietly cost you more overall. Also factor in closing costs realistically, since lender fees, appraisal, and title charges typically run two to five percent of the loan amount and directly affect your break-even timeline.
Frequently asked questions
- What is the break-even point in refinancing?
- It is the number of months it takes for your monthly savings to recover the closing costs of the refinance. You start truly saving money only after passing this point.
- Does a lower monthly payment always mean refinancing is worth it?
- No. Extending the loan term can lower the payment while increasing total interest paid. Always compare lifetime interest and your break-even timeline, not just the monthly figure.
- How much do refinance closing costs typically run?
- Closing costs usually range from about two to five percent of the loan amount, covering lender fees, appraisal, and title work. These fees determine how long it takes to break even.
- When should I avoid refinancing?
- If you plan to sell or move before reaching the break-even point, or if the new rate isn't meaningfully lower than your current rate, the closing costs may outweigh the savings.
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