How to use the Refinance Calculator
- 1 Enter your current loan balance.
- 2 Enter your current monthly principal and interest payment.
- 3 Enter the new rate, the new term and the closing costs.
- 4 Read the monthly saving and the break-even point in months.
Worked example
$300,000 balance, paying $2,150 a month, refinancing to 5.75% for 30 years with $6,000 of costs. The new payment is about $1,750.72, a saving of $399.28 a month. The break-even point is $6,000 ÷ $399.28 = 16 months, so the refinance pays off if you keep the home longer than that.
Features
Break-even point
Closing costs ÷ monthly saving shows how long you must stay to come out ahead.
New payment
Calculated with the standard amortization formula for the new rate and term.
Honest warning
If the new payment is higher, the calculator says so.
When to use it
Rates have fallen
See if a lower rate is worth the fees.
Planning to move
If you might sell within a few years, check the break-even first.
Shorter term
Compare refinancing into a 15-year loan.
Lender quotes
Enter each lender's rate and costs to compare offers.
Frequently asked questions
When does refinancing make sense?
Usually when you will stay in the home longer than the break-even period and the new rate is meaningfully lower.
What closing costs should I expect?
Often 2% to 5% of the loan amount, including appraisal, title and lender fees. Your Loan Estimate lists them.
Does a new 30-year term cost more?
It can. Restarting a 30-year term lowers the payment but may increase total interest over the life of the loan.
Should I include taxes and insurance?
No. Compare principal and interest only, because taxes and insurance stay the same after a refinance.
What is a cash-out refinance?
A new, larger loan that pays off the old one and gives you the difference in cash. This calculator assumes the balance stays the same.
Can I add closing costs to the loan?
Often yes. Rolling costs into the new balance raises the payment slightly, and you pay interest on those costs, so the break-even point comes a little later.
What is a no-closing-cost refinance?
The lender covers the costs in exchange for a higher interest rate. It can make sense if you may move or refinance again within a few years.
How much lower should the new rate be?
There is no fixed rule. Use the break-even point: if you will keep the loan well past it, even a small rate cut can be worth it.
Does refinancing affect my credit?
Applying causes a hard inquiry, which can lower your score slightly for a short time. Shopping several lenders within a short window usually counts as one inquiry for mortgage scoring.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated