Planning tool
Mortgage Refinance Calculator
Compare your current mortgage with a proposed refinance, including a new term, rate, points, closing costs, and optional cash-out. See the payment change and estimated break-even time.
Read the three refinance comparisons separately
- Monthly payment change compares scheduled principal and interest. A lower amount can come from resetting the loan to a longer term.
- Payment-only break-even divides costs entered up front by monthly payment reduction. It does not compare loan balances or value future dollars.
- Holding-period cost compares payments plus the remaining balance at the time you expect to move or refinance, then includes entered upfront costs. It subtracts cash-out proceeds but does not discount future payments.
Use the metric that matches your question. If you expect to keep the home for only several years, the balance remaining at that point matters; looking at monthly payment alone misses it.
Worked example from the prefilled inputs
For a $300,000 balance at 7% with 25 years left, the estimated monthly principal-and-interest payment is about $2,120. A new 30-year loan at 6.25% is about $1,847 per month, a reduction near $273. With $6,000 in upfront costs, the simple payment-only break-even is about 22 months.
Over the selected 10-year horizon, the tool estimates current payments plus remaining balance at about $490,341; the refinance estimate including upfront cost is about $480,371. Yet full-term interest is higher on the new 30-year loan—about $364,975 versus $336,101—because repayment restarts over a longer term. These rounded figures assume fixed monthly APR ÷ 12, no points or cash-out, and exclude escrow and other contract costs. They are examples, not an offer or recommendation.
Compare the lender documents
Compare Loan Estimates for the same loan type, balance, and features. Review APR, interest rate, points, origination charges, lender credits, cash to close, monthly principal and interest, mortgage insurance, escrow estimates, and the “In 5 years” comparison. Check how long you expect to keep the loan and whether the new term extends your payoff date. This calculator simplifies interest to a fixed monthly rate and does not replace official disclosures.
Frequently asked questions
How is the refinance break-even point estimated?
The calculator divides estimated upfront refinance costs by monthly principal-and-interest savings. It reports no break-even when the new payment is not lower. This simple estimate does not discount future dollars or model taxes, escrow, or changes in property costs.
Should I include closing costs?
Enter lender and third-party refinance costs you expect to pay. Points are added separately based on the percentage entered. Cash-out increases the new loan balance. The full-term interest comparison does not net out cash proceeds; the holding-period comparison subtracts the amount entered as cash-out.
Does a lower payment always mean refinancing saves money?
No. Extending the term can lower the payment while increasing total interest or costs over your expected ownership period. Compare the remaining term, total interest, upfront costs, and how long you expect to keep the loan.