Refinance calculator.
See whether refinancing is worth it. Compare your current mortgage with a new rate and term to get your monthly saving, how long until you break even, and the interest saved over the life of the loan.
Current and new loan
LiveBreak-even is your refinance costs divided by the monthly saving. If you keep the home past that point, refinancing pays off.
Monthly saving
$164
off your payment by refinancing
An estimate, not a loan offer or financial advice; taxes and insurance are not included. Calculations run in your browser; nothing you enter is stored.
How it works
Is refinancing worth it?
Refinancing replaces your current mortgage with a new one, usually at a lower rate. The calculator works out the payment on your current loan and on the new one, and the difference is your monthly saving. It then divides your refinance costs by that saving to find the break-even point.
On a $250,000 balance, dropping from 7% to 6% over 30 years saves about $164 a month, and with $4,000 of costs you break even in around 25 months.
Reference
Rate drop and monthly saving.
Monthly saving on a $250,000 balance over 30 years, refinancing from a 7% rate.
| New rate | Monthly saving |
|---|---|
| 6.5% | $83 |
| 6.0% | $164 |
| 5.5% | $244 |
| 5.0% | $321 |
| 4.5% | $397 |
The full guide
The complete guide to refinancing.
How the break-even point works, what the costs are, and when refinancing makes sense.
How the break-even point works
The break-even point is the number of months it takes for your monthly savings to cover the cost of refinancing. You divide the closing costs by the monthly saving. If it costs $4,000 and you save $160 a month, you break even in 25 months.
If you plan to keep the home longer than the break-even point, refinancing puts money back in your pocket. If you might move sooner, the costs may outweigh the savings.
What refinancing costs
Refinancing is not free. Closing costs typically include an application or origination fee, an appraisal, title and recording fees, and sometimes points to buy the rate down. They often run a few percent of the loan, so enter your quoted total in the costs field.
A no-closing-cost refinance rolls those fees into the loan or the rate instead, which changes the maths, so compare the true cost either way.
Rate, term and the trade-off
A lower rate cuts the monthly payment and the total interest. Changing the term matters too: resetting a loan you are partway through back to 30 years lowers the payment but can add interest over time, while a shorter term raises the payment but clears the loan faster.
This calculator lets you set both the new rate and the new term so you can see the real effect of each.
When refinancing makes sense
Refinancing tends to make sense when the rate drop is meaningful, the break-even point is comfortably shorter than how long you will stay, and you are not resetting a nearly-paid loan back to a long term. A rule of thumb is to look closely once you can drop the rate by around half a point or more.
Run your real numbers above, check the break-even, and weigh it against your plans for the home.
The formula
Save, then
break even.
The monthly saving is the gap between your old and new payment. Costs divided by that saving is your break-even in months.
Try the mortgage calculator ›# Monthly saving
saving = current_payment − new_payment
# break-even (months)
break_even = costs / saving
# worked example
$4,000 / $164 = 25 monthsQuestions
Refinance questions.
How do I calculate my refinance break-even point?
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Divide your refinance costs by your monthly saving. If refinancing costs $4,000 and saves you $160 a month, you break even in 25 months.
How much will I save by refinancing?
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It is the difference between your current monthly payment and the new one. Dropping a $250,000 balance from 7% to 6% over 30 years saves about $164 a month.
Is refinancing worth it?
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Generally yes if the rate drop is meaningful and you will keep the home past the break-even point. If you might move before then, the closing costs can outweigh the savings.
What does it cost to refinance?
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Closing costs usually include origination, appraisal, title and recording fees, and sometimes points. They often run a few percent of the loan, so use your quoted total in the costs field.
Is this refinance calculator free?
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Yes. It is completely free with no sign-up, and every calculation runs locally in your browser, so nothing you enter is stored or sent anywhere.
About the developer
Jean Borg
Jean builds and maintains every calculator on freecalculators.pro from Malta, with a focus on tools that are fast, free and show their working. The refinance calculator uses standard amortization maths and is provided for comparison and education, not as a loan offer or financial advice.