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.
By Suhaib Hassan · Updated · How we verify formulas
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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 savings to cover the closing costs of refinancing. If you stay in the home, or keep the loan, longer than that, refinancing is generally worth it on the numbers alone.
If you expect to sell or pay off the loan before breakeven, the closing costs may outweigh the savings. Your timeline is often the biggest factor in whether refinancing makes sense.
By Suhaib Hassan · Formula verified 27 Sep 2026 · How CalculatePilot verifies formulas →
How to use this refinance calculator
- Enter your current loan. Enter your remaining mortgage balance, your current interest rate and the years left on the loan.
- Enter the new loan. Enter the new loan term and the new interest rate you were offered.
- Add closing costs. Enter the estimated closing costs and fees, and choose whether to pay them upfront or roll them into the loan.
- Add cash-out if you want it. Enter a cash-out amount if you plan to borrow extra against your home. Leave it at zero for a simple rate-and-term refinance.
- Read the break-even month. Check the month you break even, the monthly savings, the five-year net benefit and the change in lifetime interest.
Worked example with the calculator defaults
You owe $320,000 at 7.25% with 26 years left. You are offered a new 30-year loan at 5.875% with $5,500 of closing costs.
- Monthly payment: $2,282 now, $1,893 after refinancing. That saves $389 a month.
- Break-even: month 16, when cumulative savings cover the $5,500 of costs.
- Five-year net benefit: +$15,413 after fees.
- Lifetime interest: $30,451 lower than keeping the old loan.
The catch is the term reset. Moving 26 years of balance onto a 30-year loan pushes your payoff date back 4 years. Paying about $2,003 a month on the new loan would keep your original payoff date.
Beyond the monthly payment
A lower monthly payment doesn't always mean less total interest. Resetting to a new 30-year term after paying down several years can increase total interest, even with a lower rate, because interest accrues for longer.
Comparing total interest between your current loan's remaining term and the new loan's full term, as this calculator does, gives a fuller picture than the monthly 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?
Key takeaways
- The break-even point is the month your monthly savings add up to your closing costs. Stay in the loan longer than that and a refinance is usually worth it.
- On the defaults, the monthly savings are $389 and break-even is month 16.
- A lower payment can still mean more interest if you reset to a longer term. Compare total interest, not just the payment.
- This is an estimate, not a lender quote. Rates, fees and eligibility depend on your lender.
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.
What is the break-even point on a refinance?
It is the month when your cumulative savings cover the closing costs. On the calculator defaults ($320,000 balance, 7.25% refinanced to 5.875%, $5,500 of costs), it is month 16.
How much does it cost to refinance?
Closing costs and fees vary by lender and loan. The calculator defaults to $5,500 on a $320,000 balance, which is about 1.7%. Enter the figure from your own loan estimate.
Should I keep my payoff date when I refinance?
It depends on your goal. Moving a 26-year balance onto a new 30-year loan lowers the payment but pushes payoff back 4 years. On the defaults, paying about $2,003 a month would keep the original payoff date.
What is a cash-out refinance?
A cash-out refinance replaces your loan with a larger one and pays you the difference in cash. Enter a cash-out amount in the calculator to see how it changes your new payment.
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