Refinance
Determine if refinancing your loan saves money and when you'll break even.
Monthly Savings
$347$/mo
You save this amount each month by refinancing.
Break-even months = how long until cumulative monthly savings cover closing costs. If you stay longer than this period, refinancing pays off.
A refinance calculator compares your current loan (balance, rate, remaining term) with proposed new loan terms (new rate, new term, closing costs). It calculates your current monthly payment, new monthly payment, monthly savings, the number of months needed to recoup closing costs, and the total lifetime interest difference between keeping your current loan and refinancing.
The calculator applies the standard loan payment formula to both your current and new loan scenarios. It computes monthly payments using the principal, interest rate, and term for each case. The break-even point is calculated by dividing closing costs by monthly savings—this shows how many months of savings you need to offset the upfront refinance costs. The lifetime interest difference reveals your total interest savings if you keep the new loan for its full term.
Payment = [P × r(1+r)^n] / [(1+r)^n - 1]; Break-Even Months = Closing Costs ÷ Monthly SavingsP is the loan principal, r is the monthly interest rate (annual ÷ 1200), and n is the loan term in months. Break-even is when cumulative monthly savings equal your closing costs.
| Input | Result | Notes |
|---|---|---|
| Current: $250,000 balance | 7% rate | 300 months left | New: 5.5% rate | 360 months | $4,000 closing costs | Monthly Savings: $183 | Current Payment: $1,663 | New Payment: $1,480 | Break-Even: 21.9 months | Lifetime Interest Difference: +$41,250 | Strong refinance case: low break-even and substantial lifetime interest savings despite lower rate and longer term |
| Current: $150,000 balance | 6.5% rate | 180 months left | New: 6% rate | 240 months | $3,000 closing costs | Monthly Savings: $41 | Current Payment: $1,087 | New Payment: $1,046 | Break-Even: 73.2 months | Lifetime Interest Difference: +$18,500 | Marginal refinance: modest rate drop and extended term mean longer break-even but still profitable long-term |
| Current: $300,000 balance | 5.5% rate | 240 months left | New: 5.8% rate | 300 months | $5,500 closing costs | Monthly Savings: −$263 | Current Payment: $1,713 | New Payment: $1,976 | Break-Even: Not applicable | Lifetime Interest Difference: −$48,900 | Do not refinance: higher new rate and longer term increase payments and lifetime cost despite lower principal remaining |
Negative savings mean your new payment would be higher than your current payment. This happens when the new rate is higher or the term is extended significantly. Do not refinance in this scenario unless other factors (like debt consolidation) justify it.
A longer term spreads payments over more months, which lowers monthly payment. However, if the new rate is much higher than the old rate, the monthly cost can still rise. The calculator shows both outcomes clearly.
Include origination fees, appraisal, title search, title insurance, legal fees, credit check, and recording fees. Ask your lender for a Loan Estimate, which itemizes all costs. Total refinancing typically runs 2–5% of the loan amount.
You should stay at least as long as the break-even period (preferably longer). If the calculator shows 24 months break-even and you plan to move in 20 months, refinancing isn't worth it.
Yes. Shortening the term increases your monthly payment but saves significant interest. Use the calculator to compare: e.g., refinance the remaining balance at a lower rate into a shorter term and see if your payment is still manageable.
You can refinance again, though you'll incur new closing costs. This calculator helps you decide if a second refinance makes sense—treat the current refinance as your 'current loan' and test the new scenario.