Monthly payment
M = P × r(1+r)^n ÷ ((1+r)^n − 1)P is the loan amount, r the monthly rate (annual rate ÷ 12) and n the number of months. This gives principal and interest only.
Monthly savings, break-even and true cost
Refinance Calculator
This mortgage refinance calculator shows whether refinancing is worth it. Compare your current loan with a new one to see the new monthly payment, how many months it takes to break even on closing costs, and your true savings over the time you plan to keep the loan.
Mortgage refinance calculator
Cumulative benefit of refinancing
Includes payment savings, upfront costs and the difference in loan balance.
| Item | Current | New |
|---|
Formulas
How Refinance Savings Are Calculated
Refinancing replaces your current mortgage with a new one. Whether it pays off depends on three numbers: the new payment, the cost to refinance and how long you keep the new loan.
Simple break-even
Months = Closing costs ÷ Monthly savings$6,000 of costs and $265 of monthly savings break even in about 23 months.
True benefit
Savings + balance difference − costsA new 30-year loan pays down principal more slowly, so the calculator also compares what you would still owe at any point in time.
Watch the term reset. Taking a fresh 30-year loan lowers the payment but can add years of interest. Choose Same as remaining to compare like for like, or model a payment for a new purchase with the mortgage calculator.
Reference
Monthly Payment per $100,000 Borrowed
Principal and interest for every $100,000 at common rates. Multiply by your loan size in hundreds of thousands to estimate a payment.
| Rate | 30-year | 20-year | 15-year |
|---|---|---|---|
| 5.0% | $537 | $660 | $791 |
| 5.5% | $568 | $688 | $817 |
| 6.0% | $600 | $716 | $844 |
| 6.5% | $632 | $746 | $871 |
| 7.0% | $665 | $775 | $899 |
| 7.5% | $699 | $806 | $927 |
| 8.0% | $734 | $836 | $956 |
Timing
When Does Refinancing Make Sense?
Refinancing is usually worth a closer look when one or more of these is true.
- Rates have dropped. A fall of around 0.5 to 1 percentage point or more often creates meaningful savings, depending on your loan size and costs.
- You will stay past break-even. If you plan to move or sell before you recover the closing costs, refinancing can lose money.
- You want a shorter term. Moving from 30 to 15 years raises the payment but can save a large amount of interest.
- You want to drop mortgage insurance. If your home has gained value, a refinance can remove PMI once you reach enough equity.
- You want certainty. Switching from an adjustable rate to a fixed rate protects you from future rate rises.
Why ours
Why This Refinance Calculator Is Better
Many refinance calculators stop at the new payment. That can make a bad refinance look good.
True break-even
Accounts for the slower principal paydown of a new long loan, not just monthly savings, so the answer is honest.
Costs, points and roll-in
Enter closing costs and points, and choose whether to pay upfront or roll them into the new loan.
Cash-out refinance
Add a cash-out amount and see the real cost of borrowing against your home equity.
Your time horizon
Tell it how long you will keep the loan and see net savings for exactly that period.
Side-by-side table
Compare payments, interest, total cost and payoff date for both loans in one view.
Shareable
Send the exact scenario to your partner or loan officer with one link. Nothing is stored or sent anywhere.
Guide
How to Use the Refinance Calculator
Your latest mortgage statement has the numbers you need. Results update as you type.
- Enter your current loan
Add the remaining balance, interest rate and years left from your statement.
- Enter the new offer
Add the new rate and term from your loan estimate.
- Add costs and points
Enter total closing costs and any discount points, and choose whether to roll them into the loan.
- Set your time horizon
Enter how many years you expect to keep the loan before selling or refinancing again.
- Read the verdict
Check monthly savings, break-even and the benefit chart, then copy or share the results.
Benefits
Benefits of Running the Numbers First
A refinance is a big financial decision. A few minutes with the numbers can save thousands.
Compare lender offers
Plug in each loan estimate to see which rate and fee combination truly costs least over your horizon.
Decide on points
See whether paying points for a lower rate pays off before you expect to move.
Avoid costly resets
Spot when a lower payment hides a higher total cost because of a longer term.
Plan the bigger picture
Check your budget with the debt to income ratio calculator and home affordability calculator.
FAQ
Refinance FAQ
How do I calculate how much I will save by refinancing?
Subtract the new monthly principal and interest payment from your current one to get monthly savings. Then divide your closing costs by those savings to find how many months it takes to break even. For a full picture, also compare total interest and what you would still owe at the point you expect to sell.
Is it worth refinancing for a 1% lower rate?
Often, yes. On a $300,000 balance with 27 years left at 7%, a new 30-year loan at 6% cuts the payment by about $265 a month. With $6,000 of closing costs, the simple break-even is about 23 months. It is worth it if you stay in the home well beyond that point.
How much does it cost to refinance a mortgage?
Refinance closing costs typically run about 2% to 5% of the loan amount. They include lender origination fees, appraisal, title insurance, recording fees and any discount points you choose to pay.
What is the refinance break-even point?
The break-even point is how long it takes for your monthly savings to cover the cost of refinancing. If refinancing costs $6,000 and saves $250 a month, you break even after 24 months. If you sell or refinance again before then, you lose money.
When should I refinance my mortgage?
Consider refinancing when rates are about 0.5 to 1 percentage point or more below your current rate, when you plan to stay past the break-even point, when you want to shorten your term, remove mortgage insurance or switch from an adjustable to a fixed rate.
Does refinancing restart my mortgage term?
It can. If you take a new 30-year loan, your payoff date moves further away and you may pay more total interest even with a lower rate. Choosing a term that matches the years you have left, or a shorter one, avoids this.
What is a cash-out refinance?
A cash-out refinance replaces your mortgage with a larger loan and pays you the difference in cash. For conventional loans, lenders usually limit the new loan to about 80% of your home’s value. The cash is useful, but you pay interest on it for the life of the loan.
Should I pay points when I refinance?
Each point costs 1% of the loan amount and usually lowers your rate by a fraction of a percent. Points make sense if you will keep the loan long enough for the lower payment to repay their cost. Enter points in the calculator to see your break-even with and without them.
Does refinancing hurt your credit score?
A refinance causes a hard credit inquiry and a new account, which can lower your score slightly for a short time. Credit scoring models usually treat several mortgage inquiries within a short shopping window as one, so you can compare lenders without extra damage.
Know Before You Refinance
Use the refinance calculator with every loan offer you receive, then plan the rest of your home finances with our related tools.
Check my refinanceEstimates cover principal and interest only and exclude taxes, insurance and escrow. This is not financial advice. Confirm all figures with your lender.