Refinance Calculator
Check whether refinancing at a new rate saves money after closing costs.
About the Refinance Calculator
Enter your current balance, rate and years left, then the new rate, new term and the cost of refinancing. The calculator shows the change in monthly payment, how many months it takes for the saving to repay the costs, and the total you'd pay under each loan.
Refinancing pays off if the monthly saving recovers the costs before you'd move or refinance again. Stretching the term can lower the payment but raise total interest, so compare both numbers.
The formula
Break-even months = costs ÷ monthly saving
Worked example
250,000 left at 7.25% with 25 years to go; new rate 6.25% over 25 years; costs 5,000
- Payment falls from 1,807.02 to 1,649.17: a saving of 157.84 a month
- Break-even: 5,000 ÷ 157.84 ≈ 32 months
- Total paid: 499,752 (including costs) versus 542,105, saving 42,353
Things to keep in mind
- Assumes fixed rates and that you keep the new loan for its whole term.
- Costs paid by adding them to the loan raise the balance; enter them as costs here and remember you'll pay interest on them.
Questions people ask
How big a rate drop is worth it?
It depends on costs and how long you'll stay; the break-even month tells you.
Does refinancing reset the clock?
Yes, unless you choose a shorter term.
What about cash-out refinancing?
Borrowing more than you owe raises the balance and payment. Enter the new, larger balance to see the effect.