Mortgage Refinance Calculator
Monthly savings, breakeven months, and lifetime gain from refinancing.
What it does
Refinancing swaps the current mortgage for a cheaper one, but closing costs charge admission. The deal earns only when monthly savings repay those costs before selling or refinancing again, which makes the breakeven month the whole decision.
The tool above prices both payments over the remaining term from balance and rates. It returns monthly savings, the breakeven month, and lifetime savings net of closing costs.
Term resets hide inside headline savings. Refinancing back to thirty years can cut the payment while raising lifetime interest, so compare remaining term to remaining term, not payment to payment alone.
No closing cost offers still cost through higher rates or rolled balances. Lenders always collect; the only question is whether the interest math still wins.
How to use
- Enter the current balance, not the original loan.
- Enter both rates and the years left, not the original term.
- Enter true closing costs with points.
- Refinance only when the hold horizon passes breakeven.
Formula
- P
- Remaining balance refinanced.
- n
- Payments left, not the original count.
- closing
- One time costs divided across future savings.
Rate quotes assume excellent credit and points choices. The locked offer with total closing costs decides, not the advertised rate.
Worked example
Example: $300,000, 7.5% to 6.5%, 25 years left, $6,000 closing
Balance 300,000, rates 7.5 and 6.5, 300 payments left, closing 6,000.
- Old payment: $2,216.97 a month.
- New payment: $2,025.62 a month.
- Savings: 2,216.97 - 2,025.62 = $191.35 a month.
- Breakeven: 6,000 / 191.35 = 31.36, so 32 months.
- Lifetime: 191.35 x 300 - 6,000 = $51,405.61 saved.
Reference table
| Saved monthly | Breakeven | Verdict |
|---|---|---|
| $100 | 60 months | Only for long holds |
| $150 | 40 months | Fair |
| $191 | 32 months | Good |
| $300 | 20 months | Strong |
Limits
- Same remaining term assumed. Term changes need separate math.
- Ignores tax, insurance, and escrow shifts.
- Credit and appraisal outcomes can move the offer.
- Adjustable loans reset the comparison later.
Common mistakes
- Comparing payments across different remaining terms.
- Ignoring closing costs against small savings.
- Restarting thirty years and raising lifetime interest.
- Refinancing before a near term sale.
- Chasing rate ads without locked closing totals.
Try it yourself
Quick checks. Answers sit tucked under each question.
$4,000 closing, $200 monthly savings. Breakeven?
4,000 / 200 = 20 months.
Sell planned in 12 months. Refinance?
No, unless savings beat closing inside a year. Here they do not.
Questions
When is refinancing worth it?
When savings repay closing well before selling: commonly a one to two point drop held for years.
What does breakeven mean?
The month cumulative savings pass closing costs. Before it the refi loses; after, it earns.
Does a lower payment always save?
No. Longer terms can cut payments while raising lifetime interest.
What are typical closing costs?
Two to five percent of the loan: fees, points, appraisal, and title.
Can I roll costs into the loan?
Yes, but the balance and breakeven both grow. Compare with cash paid costs.
How often can I refinance?
As often as math wins, minus seasoning rules and appraisal costs each round.