Mortgage Refinance Calculator

Should you refinance? Compare your current mortgage to a new loan. See your monthly savings, total interest savings, and exactly how many months until refinancing pays off.

Current Loan

$
%
yrs

New Loan

%
$
Monthly Savings
+$296
Break-even: 1 yr 5 mo (17 months)
Current Payment
$1,774
New Payment
$1,478
Current Total Interest
$292,074
New Total Interest
$291,980
Net Savings (after costs)
-$4,906
Break-Even
17 months

Total Cost Comparison

KEEP CURRENT LOAN

$532,074

$1,774/mo · 25 yrs remaining

REFINANCE

$536,980

$1,478/mo · 30 yr term · $5,000 closing costs

How to Use This Refinance Calculator

This calculator answers the key refinancing question: will the savings outweigh the costs, and for how long do you need to stay in the home?

Rate & Term Refinance Tab

Enter your Current Balance, Current Rate, and Years Remaining. Then enter the New Rate you've been quoted, New Term, and estimated Closing Costs. The calculator instantly shows monthly savings, break-even months, and total cost comparison. If your break-even is 18 months and you plan to stay 10 years, refinancing is likely worth it.

Cash-Out Refinance Tab

A cash-out refinance lets you access home equity by borrowing more than you owe. Enter your Home Value and Cash-Out Amount. The calculator checks if your new LTV stays within the typical 80% limit and shows how your payment changes. Cash-out refinancing usually carries a slightly higher rate than rate-and-term refinancing.

Refinance Break-Even Formula

Monthly Savings = Current Payment − New Payment

Break-Even Months = Closing Costs ÷ Monthly Savings

Total Interest Savings = Current Remaining Interest − New Total Interest − Closing Costs

Cash-Out LTV = (Current Balance + Cash-Out Amount) ÷ Home Value × 100

The break-even point is the most important metric in a refinance decision. If you'll sell or move before break-even, refinancing costs you money. If you'll stay well past break-even, refinancing makes strong financial sense.

Example: Jennifer Refinances Her Denver Home

Scenario: Bought in 2022 at 7.5%, refinancing to 6.25% in 2025

Current Balance$240,000
Current Rate7.5%
Years Remaining25
Current Monthly Payment$1,776
New Rate6.25%
New Term25 years
New Monthly Payment$1,591
Monthly Savings$185
Closing Costs$5,000
Break-Even27 months (2.25 years)
Total Interest Savings~$43,000 (net of costs)

Jennifer plans to stay for at least 5 years. She breaks even in 27 months, so she'll save roughly $43,000 over the life of the loan by refinancing.

Frequently Asked Questions

Refinancing makes sense when: (1) you can reduce your rate by at least 0.5-1%, (2) you plan to stay in the home past the break-even point, and (3) the net long-term savings are meaningful. As a rule of thumb, a 1% rate reduction on a $250,000 balance saves about $150/month. With $5,000 in closing costs, break-even is about 33 months.
It depends on your goals. A 15-year refinance has a lower rate and saves massive amounts of interest, but payments are higher. If you're 5+ years into a 30-year mortgage, refinancing into a 25-year loan keeps your payoff date roughly the same. Refinancing into a new 30-year extends your payoff and may reduce monthly payments but increases total interest paid.
Refinancing closing costs typically run 2-5% of the loan amount. On a $240,000 loan, that's $4,800-$12,000. Key costs include: origination fee (0.5-1% of loan), appraisal ($300-600), title search and insurance ($700-900), recording fees ($50-500), and prepaid items (insurance, taxes, interest). Some "no-cost" refinances roll costs into the rate or loan balance.
With a cash-out refinance, you replace your current mortgage with a larger loan and receive the difference as cash. Most lenders limit the new loan to 80% of your home's value (80% LTV). So on a $380,000 home, you could borrow up to $304,000. If you owe $240,000, you'd receive up to $64,000 in cash. The cash can be used for home improvements, debt consolidation, or other needs.
Refinancing has a small, temporary impact on your credit. Each lender that pulls your credit creates a "hard inquiry" which may lower your score by a few points for up to a year. However, if you rate-shop within a 14-45 day window, credit bureaus typically count all inquiries as a single inquiry. The long-term benefit of a lower rate far outweighs the temporary credit impact.

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