Mortgage Refinance Calculator
This tool shows whether refinancing your mortgage is worth the closing costs. It compares your current monthly payment to a new payment at a lower rate, spread over the years you have left, then finds the point where your monthly savings have covered the cost of refinancing. Move the sliders to see your monthly savings, break-even month, and total savings over the life of the loan.
New payment $1,842, saving $278/month. You break even on the $6,000 in closing costs in about 22 months, then save $77,423 over the remaining term.
Worked examples
Real results from this calculator, computed for a few common scenarios. Move the sliders above to run your own numbers.
| Current balance = $440,000 | New payment $2,702, saving $408/month. You break even on the $6,000 in closing costs in about 15 months, then save $116,353 over the remaining term. |
| Current balance = $1,025,000 | New payment $6,294, saving $950/month. You break even on the $6,000 in closing costs in about 7 months, then save $279,027 over the remaining term. |
| Current balance = $1,610,000 | New payment $9,887, saving $1,492/month. You break even on the $6,000 in closing costs in about 5 months, then save $441,701 over the remaining term. |
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How this math works
The calculator works out your current monthly payment, then re-amortizes the same balance at the new rate over the years remaining to find the new payment. The difference is your monthly savings. Dividing the closing costs by that monthly savings gives the break-even month, the point at which the refinance has paid for itself, after which the savings are yours to keep.
The break-even month is the key number to watch. If you plan to stay in the home well past that point, the refinance is likely worth it, and the lifetime savings show the full benefit. If you might sell or refinance again before break-even, you could lose money on the closing costs, so a low rate alone does not guarantee a good deal.
Common questions
What is the break-even point?
It is the month when your accumulated monthly savings finally equal the closing costs you paid to refinance. Before that point you are still recovering the cost, and after it the savings are pure benefit, so it tells you how long you need to keep the loan for the refinance to pay off.
Does refinancing reset my loan term?
This calculator re-amortizes over the years you have remaining, so it does not stretch the term back out. If you instead refinance into a new longer term, your monthly payment could drop more, but you may pay more total interest, which this tool does not assume.
Is a lower rate always worth refinancing?
No. A lower rate reduces your payment, but closing costs must be earned back through savings first. If you will not keep the loan past the break-even month, the refinance can cost more than it saves, so weigh the break-even against how long you plan to stay.
Put this calculator on your website
Bloggers, teachers, credit unions, HR teams: embed the live Mortgage Refinance Calculator free. Copy the snippet below — the tool keeps working and stays up to date automatically, no maintenance on your side.
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