Refinance Calculator
Quickly find your Refinance savings & break-even with our free Refinance Calculator. Simple, fast, and accurate.
Current & new loan
Refinance result
What is a Refinance Calculator?
A Refinance Calculator helps you decide whether refinancing your mortgage makes financial sense. It compares your current monthly payment against a new loan at a lower rate, showing your monthly savings, total interest saved, and break-even point.
How to calculate refinance savings manually (the formula)
Calculate your current and new monthly payments using the mortgage formula: Payment = P × r(1+r)^n / ((1+r)^n - 1). Monthly savings = Current Payment - New Payment. Break-even = Closing Costs / Monthly Savings (in months).
Example calculation
You have a $280,000 loan at 7.0% with 27 years left ($1,887/month). A new 30-year loan at 5.75% with $4,000 closing costs gives a $1,634/month payment. Monthly savings = $253. Break-even = $4,000 / $253 = about 16 months. If you stay longer than 16 months, refinancing pays off.
Common mistakes
- Only looking at the rate — A lower rate is great, but factor in closing costs and how long you plan to stay before it pays off.
- Resetting the loan term — A 30-year refinance resets the clock. You may pay more total interest even with a lower rate.
- Ignoring the break-even point — If you sell or move before the break-even, you lose money on the refinance.
Frequently asked questions
Should I refinance my mortgage?
Refinancing makes sense if you can lower your interest rate enough to recoup closing costs within the time you plan to stay in the home. Our calculator shows your monthly savings and break-even point.
How do I calculate refinance savings?
Compare your current monthly payment to the new payment. Multiply the monthly savings by the number of months you plan to stay, then subtract closing costs.
What is the break-even point in refinancing?
The break-even point is the number of months it takes for your monthly savings to equal the closing costs. If you move before then, you lose money.
Should I choose a shorter loan term when refinancing?
A shorter term (15 or 20 years) usually has a lower rate and saves interest over time, but the monthly payment is higher. Compare both options.
Is this calculator free?
Yes, completely free with no sign-up required.