Enter your current loan, new rate, and closing costs to see your break-even point, monthly savings, and whether refinancing is actually worth it.
| Current loan | Refinanced loan | |
|---|---|---|
| Monthly payment | — | — |
| Remaining term | — | — |
| Total remaining interest | — | — |
| Total remaining cost | — | — |
Refinancing replaces your current mortgage with a new one — usually at a different rate, term, or both. The goal is typically to lower your monthly payment, reduce total interest, or tap home equity. But refinancing costs money upfront, so the key question is always: will I stay long enough to recover those costs?
The break-even calculation is straightforward: divide your total closing costs by the monthly savings the new loan provides. If closing costs are $5,500 and you save $220/month, break-even is 25 months. Before month 25, you are behind. After month 25, every month is a net gain. This calculator runs the full amortization on both loans to give you precise numbers rather than estimates.
Refinance closing costs typically run 2%–5% of the loan balance and include:
Some lenders offer "no-closing-cost" refinances where fees are rolled into the rate or loan balance. This reduces upfront expense but increases long-term cost — factor it in accordingly.
A cash-out refinance lets you borrow against your equity by replacing your mortgage with a larger one. The difference comes to you in cash. It can be useful for funding home improvements (which may increase value), consolidating high-interest debt, or covering major expenses. However, it adds to your loan balance, extends your amortization, and increases total interest paid. If the cash-out amount significantly exceeds the break-even savings, the true payoff period extends accordingly.
When you refinance into a new 30-year term, your amortization clock resets. The first years of any new mortgage are heavily weighted toward interest. If you are 10 years into a 30-year loan and refinance into another 30-year, you are now paying interest for 40 years total rather than 30. A refinance into a 20- or 15-year term avoids this problem while still potentially reducing the rate. Always compare total remaining cost, not just monthly payment, when evaluating a refinance.