Refinance Calculator

How this calculator works

Refinancing replaces your current mortgage with a new one — ideally at a lower rate — but it isn't free. Closing costs on a refinance typically run 2–5% of the loan amount, due again just like your first mortgage. This calculator compares your current monthly payment to your new one, then divides the closing costs by the monthly savings to find your break-even point: the month you've saved enough to cover what the refinance cost you.

Reading the break-even point

If your break-even point is 18 months and you're confident you'll stay in the home longer than that, refinancing is likely a win — every month after break-even is pure savings. If you might sell or move before then, the math likely doesn't favor refinancing, however attractive the new rate looks on its own.

When refinancing tends to make sense

• Rates have dropped meaningfully since you took out your current loan — even 0.75–1% can be worth it on a large balance.
• Your credit improved since your original mortgage, qualifying you for a better rate than before.
• You want to drop PMI after building enough equity, or shorten your term to pay off the home faster.

What this calculator doesn't include

It compares principal-and-interest payments only. If you're also changing your loan term (say, 30 years down to 15), your payment may rise even as your total interest falls dramatically — a genuinely different decision than a same-term rate refinance. Run the Mortgage Calculator with your new term to see that full picture.