Refinance Calculator
Is refinancing worth it? Monthly savings, break-even on closing costs and lifetime interest, including the catch when a new 30-year term restarts the clock.
New rate defaults to the U.S. average 30-year fixed of 6.76% (Freddie Mac PMMS, week of 2026-09-10).
Refinance Calculator: with the default inputs, monthly payment savings is $115.66.
Use decimals for months, e.g. 27.5 = 27 years 6 months.
Lender fees, appraisal, title and points. Typically 2–5% of the loan.
Current payment minus new payment. Negative means the new payment is higher.
- Break-even on closing costs
- 4 years, 4 months
- Lifetime interest difference
- -$32,648Interest left on the current loan minus interest on the new loan. Positive = you save.
- Net lifetime savings after closing costs
- -$38,648
- New monthly payment
- $1,947.79
- Current monthly payment
- $2,063.44
- New loan amount
- $300,000
- Interest left on current loan
- $368,556
- Interest on new loan
- $401,204
- If you keep paying your current payment on the new loan
- Paid off in 25 years, 5 months with $327,889 interest ($40,667 less than staying put)Payoff time and interest if you don't pocket the savings.
Assumptions
- Both loans are fixed-rate and fully amortizing; interest is charged monthly at the annual rate ÷ 12.
- The lifetime comparison runs each loan to its full term with no prepayments.
- Closing costs are paid in cash unless you roll them in; taxes, escrow and PMI changes are ignored.
How this is worked out
The formula
Monthly savings = current payment − new payment Break-even (months) = closing costs ÷ monthly savings Lifetime interest difference = (current payment × months left − balance) − (new payment × new months − new loan) Payments use M = P × r(1 + r)^n ÷ ((1 + r)^n − 1) with r = annual rate ÷ 12
Open How it’s calculated above to see this worked through with your own numbers.
What you enter
- Current loan balance
- A number.in dollars · 0 or more · defaults to 300000
- Current interest rate
- A number.a percentage · from 0 to 30 · defaults to 7
- Years remaining
- Use decimals for months, e.g. 27.5 = 27 years 6 months.from 0.5 to 40 · defaults to 27
- New interest rate
- A number.a percentage · from 0 to 30 · defaults to 6
- New loan term
- A number.from 1 to 40 · whole numbers only · defaults to 30
- Closing costs
- Lender fees, appraisal, title and points. Typically 2–5% of the loan.in dollars · 0 or more · defaults to 6000
- Cash out(under More options)
- Extra cash added to the new loan balance.in dollars · 0 or more · defaults to 0
- Roll closing costs into the new loan(under More options)
- Turn this on or off.defaults to off
What you get back
- Monthly payment savingsmain answer
- Current payment minus new payment. Negative means the new payment is higher.
- Break-even on closing costs
- Lifetime interest difference
- Interest left on the current loan minus interest on the new loan. Positive = you save.
- Net lifetime savings after closing costs
- New monthly payment
- Current monthly payment
- New loan amount
- Interest left on current loan
- Interest on new loan
- If you keep paying your current payment on the new loan
- Payoff time and interest if you don't pocket the savings.
What this assumes
- Both loans are fixed-rate and fully amortizing; interest is charged monthly at the annual rate ÷ 12.
- The lifetime comparison runs each loan to its full term with no prepayments.
- Closing costs are paid in cash unless you roll them in; taxes, escrow and PMI changes are ignored.
About this calculator
Refinancing swaps your current mortgage for a new one — ideally at a lower rate — but the new loan comes with closing costs and, usually, a fresh 30-year term. That makes "is it worth it?" a three-part question: how much lower is the payment, how long until the savings cover the costs, and what happens to the total interest once you account for the extra years. This calculator answers all three and flags the common trap where a lower payment quietly costs more over the life of the loan.
How to use it
Under Current loan, enter your remaining balance, rate and years left (your latest statement has all three). Under New loan, enter the rate you've been quoted, the term, and the closing costs from the Loan Estimate. The new rate defaults to this week's national average 30-year fixed. More options lets you add cash-out or roll the closing costs into the loan.
Reading the results
- Monthly payment savings is the headline, but it's also the number most easily inflated by stretching the term.
- Break-even is closing costs divided by monthly savings. If you might sell or refinance again before then, don't do it.
- Lifetime interest difference compares the interest left on your current loan with the interest on the new loan run to its full term. When it's negative, the "savings" are an illusion created by the longer term.
- If you keep paying your current payment shows the honest alternative: refinance to the lower rate but keep sending the old amount. You retire the loan years early and capture the full benefit of the rate drop.
Rules of thumb
The old "refinance if you can drop the rate by 1%" guideline is crude. What matters is break-even versus how long you'll stay, and lifetime interest versus what you'd otherwise pay. Late in a loan, most of your payment is already principal, so even a sizable rate cut saves less than it would have in year two. A 15- or 20-year refinance often beats a 30-year one on total cost while still lowering the payment a little.
What's not modeled
Escrow changes, PMI dropping off because your equity grew, prepayment penalties on the old loan, and the tax deductibility of interest. Points are just part of closing costs here — if you're comparing a zero-point and a two-point offer, run both.
Frequently asked questions
▸When is refinancing worth it?
When you'll stay past the break-even point and the lifetime interest doesn't go up — or you commit to keeping your old payment so the lower rate shortens the loan. A lower payment alone isn't a reason if it comes from resetting to 30 years.
▸What are typical refinance closing costs?
Usually 2–5% of the loan amount: origination fees, appraisal, title insurance, recording fees and any discount points. Your Loan Estimate lists them; 'no-closing-cost' loans recover them through a higher rate.
▸Why can a lower payment cost more in the end?
Because you're paying interest for more years. Going from 27 years left to a new 30-year loan adds three years of payments, and early payments are mostly interest. The lifetime interest difference here catches that.
▸Should I roll closing costs into the loan?
It avoids cash out of pocket but you pay interest on them for 30 years and your break-even is pushed out. If you have the cash, paying them upfront is cheaper.
▸How does a cash-out refinance differ?
You borrow more than you owe and take the difference in cash. Rates are typically a bit higher, and your monthly saving shrinks or reverses because the balance is bigger. Compare it with a home equity loan that leaves your first mortgage alone.
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