Mortgage Refinance Calculator
See if refinancing saves money - monthly payment drop, break-even point, and net savings after closing costs.
🔄 What is a Mortgage Refinance Calculator?
A mortgage refinance calculator helps homeowners determine whether replacing their existing mortgage with a new loan at a different rate or term will save money - and by exactly how much. Refinancing sounds simple, but the true benefit depends on three factors: the monthly payment reduction, the closing costs you must pay upfront, and how long you plan to stay in the home. Getting any of these wrong can turn a seemingly attractive refinance into a money-losing decision.
This calculator handles the full refinance analysis in one place. Enter your current remaining balance, existing rate, and remaining term, then compare against a new rate and term from your lender. Add estimated closing costs and the tool instantly shows your new monthly payment, your monthly savings, the exact break-even period (months until savings exceed closing costs), the total interest saved over the life of the new loan, and a net savings figure after accounting for what you paid to refinance.
Common refinance scenarios include: dropping from a 7% to a 6% rate to lower monthly payments; refinancing from a 30-year to a 15-year term to pay off the home faster and save massively on interest; or refinancing out of an adjustable-rate mortgage (ARM) into a fixed rate for payment stability. Each scenario has a different math profile - a rate-and-term refinance focused on monthly savings has different break-even dynamics than shortening your term to save on total interest even though monthly payments rise.
Two critical factors that simple "1% rule" estimates ignore: the term reset problem and closing cost drag. If you are 10 years into a 30-year mortgage and refinance into a new 30-year, you extend your payoff date by 10 years, which can mean paying more total interest despite a lower rate. And closing costs of 2%–5% of the loan balance can take 2–4 years to recover in monthly savings - if you sell or refinance again before reaching that break-even point, you've lost money. This calculator makes both of these dynamics transparent and quantifiable.
📐 Formula
📖 How to Use This Calculator
Steps to Analyze Your Refinance Decision
💡 Example Calculations
Example 1 — Rate Drop Refinance, Same Term
$250,000 balance | 7.5% → 6.0% | 25 years remaining → new 30-year | $5,000 closing costs
Example 2 — Term Shortening Refinance (30→15 Year)
$300,000 balance | 7.0% → 6.25% | 20 years remaining → new 15-year | $7,500 closing costs
Example 3 — Small Rate Drop, High Closing Costs (Borderline Case)
$180,000 balance | 6.75% → 6.25% | 22 years remaining → new 22-year | $6,000 closing costs
❓ Frequently Asked Questions
🔗 Related Calculators
How do I calculate if refinancing is worth it?
Divide your total closing costs by your monthly payment reduction. If you plan to stay in the home longer than that break-even period, refinancing saves money. For example, $5,000 in closing costs ÷ $200/month savings = 25 months to break even. If you stay 5 more years, you save $200 × 60 − $5,000 = $7,000 net.
What closing costs should I expect when refinancing?
Typical refinance closing costs run 2%–5% of the loan amount. Key fees include lender origination fee (0.5%–1%), appraisal ($400–$700), title search and insurance (0.5%–1%), recording fees ($50–$500), and prepaid interest. On a $300,000 loan, expect $6,000–$15,000 in closing costs. Some lenders offer no-closing-cost refinances by adding costs to the rate or loan balance.
Does refinancing restart my mortgage term?
Yes - refinancing into a new 30-year loan restarts your amortization schedule from scratch. If you are 10 years into a 30-year mortgage and refinance into a new 30-year, you now have 30 years remaining instead of 20. Even with a lower rate, you may pay significantly more total interest. Consider refinancing into a 15- or 20-year term to preserve your payoff timeline.
How much does a 1% lower rate save on a $300,000 mortgage?
On a $300,000, 30-year mortgage at 7% vs 6%: the 7% payment is $1,996/month; the 6% payment is $1,799/month - a $197/month savings. Over 30 years, total interest drops from $418,600 to $247,600 - saving $171,000 in interest. After typical $6,000–$9,000 in closing costs, net lifetime savings are $162,000–$165,000.
What is a good break-even period for a mortgage refinance?
Most financial advisors suggest a break-even period of 24–36 months (2–3 years) or less as a good threshold. If you know you will stay in the home for at least double the break-even period, refinancing is clearly beneficial. If you're uncertain about your plans, a shorter break-even period gives you more flexibility.
Should I refinance to a 15-year or 30-year mortgage?
A 15-year refinance has a higher monthly payment but builds equity faster and saves massively on interest - typically 50–60% less total interest than a 30-year. If the 15-year payment is comfortably affordable (under 28% of gross monthly income), it's often the better long-term choice. Choose 30 years if you need the lower payment flexibility or plan to invest the difference at a higher return.
Can I refinance if I have PMI?
Yes, and refinancing can eliminate PMI if your home has appreciated enough that your new loan-to-value ratio is 80% or below. If your original home price was $300,000 and your new loan balance is $230,000, you are at 76.7% LTV on the original value - you can request PMI removal. Confirm current appraised value with a lender appraisal.
Is a no-closing-cost refinance worth it?
A no-closing-cost refinance avoids upfront fees by either rolling costs into the loan balance or accepting a slightly higher rate. This makes sense if your break-even period would otherwise be long (3+ years) or if you plan to sell or refinance again within a few years. However, if you stay long-term, paying closing costs upfront and getting the lowest possible rate saves more money overall.