Mortgage Refinance Calculator
Compare your current loan with a refinance offer: monthly savings, the month you break even on closing costs, and whether resetting the loan term costs you more interest in the long run.
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Year-by-Year Amortization Comparison
Interest burden, principal paid and cumulative net benefit over the first 10 years.
| Year | Current Loan Int. | Refinance Int. | Annual Int. Savings | Refi Principal Paid | Cumulative Net Benefit |
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Mathematical Methodology
The quick rule of thumb divides closing costs by the monthly payment saving. This calculator also tracks the loan balances, because a longer new term lowers the payment partly by paying off principal more slowly.
Break-Even (Months) = Closing Costs ÷ (Old P&I − New P&I)—
The verdict above uses the fuller net-benefit method, so it can be later than the quick estimate when the term is reset — and it still works when costs are rolled into the loan or you take cash out.
When NOT to Refinance
A lower rate alone doesn't guarantee a good decision. Be cautious when:
- You'll move before breaking even
If you sell or refinance again before the break-even month, closing costs exceed your savings.
- You're deep into your current loan
Years into a 30-year loan, most of each payment goes to principal. Restarting a new 30-year term puts you back at the interest-heavy start.
- Switching from a fixed rate to an ARM
An adjustable rate can reset higher after the intro period, which can erase the savings.
What breakeven point means
The breakeven point is how many months it takes for your monthly savings to cover the closing costs of refinancing. If you plan to stay in the home (or keep the loan) longer than the breakeven period, refinancing is generally worth it purely on the numbers.
If you expect to sell or pay off the loan before reaching breakeven, the closing costs may outweigh the savings — timeline is often the single biggest factor in whether refinancing makes sense.
By Suhaib Hassan · Formula verified 27 Sep 2026 · How CalculatePilot verifies formulas →
Beyond the monthly payment
A lower monthly payment doesn't always mean less total interest — resetting to a new 30-year term after already paying down several years of a loan can sometimes increase total interest paid over time, even with a lower rate, because you're extending how long interest accrues.
Comparing total interest between the current loan's remaining term and the new loan's full term (as this calculator does) gives a more complete picture than the monthly payment difference alone. If you're still deciding on your original loan terms, the Mortgage Calculator covers that first step.
Read the guide: How long does it take to break even on a refinance?
Frequently asked questions
Is refinancing worth it if I'm planning to move soon?
Generally not, if you'd move before reaching the breakeven point — the closing costs may not be recovered through monthly savings in that case.
Can refinancing increase my total interest even with a lower rate?
Yes — resetting to a longer term (e.g., back to 30 years after already paying several years) extends how long interest accrues, which can offset some or all of the benefit of a lower rate.
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