Refinance Calculator
Calculate if refinancing your mortgage makes financial sense. Compare your current loan vs new loan and find your break-even point.
Current Loan
New Loan
Monthly Savings
$0
How to Use the Refinance Calculator
Enter your current loan details and the new loan terms you're considering. Include closing costs for an accurate break-even analysis. The calculator instantly compares monthly payments, total interest, and tells you exactly when refinancing starts saving you money.
Break-Even Formula
Break-Even Months = Closing Costs รท Monthly Savings If you stay past the break-even point, refinancing saves you money overall.
When Refinancing Makes Sense
Refinance if you can lower your rate by at least 0.75%, plan to stay past the break-even point, have 20%+ equity, and a credit score above 700. Also consider refinancing to switch from a 30-year to a 15-year term to build equity faster.
Frequently Asked Questions
- Refinancing makes sense when you can lower your rate by at least 0.5โ1%, plan to stay in the home past the break-even point, have good credit (720+), and at least 20% equity. Also consider refinancing to shorten your term or eliminate PMI.
- Break-even months = Closing costs รท Monthly savings. If your closing costs are $4,000 and you save $200/month, break-even is 20 months. If you plan to stay longer than that, refinancing saves money overall.
- Savings depend on the rate difference, remaining balance, and new term. On a $300,000 balance, dropping from 7% to 6% saves roughly $180/month (~$2,160/year). Over 20 years that's $43,200 in interest savings minus closing costs.
- Refinance closing costs typically run 2โ5% of the loan balance. On a $250,000 loan that's $5,000โ$12,500. Common fees include origination fees, appraisal, title search, recording fees, and prepaid interest. Some lenders offer no-closing-cost refis at a slightly higher rate.
- A rate-and-term refinance only changes your interest rate and/or loan term โ you don't touch your equity. A cash-out refinance lets you borrow more than you owe, receiving the difference in cash. Cash-out refis have slightly higher rates and reset your equity clock.
- Total savings = (Total interest on current loan) โ (Total interest on new loan) โ (Closing costs). Our calculator computes this automatically. Remember to factor in that extending your term can lower monthly payments but increase lifetime interest.
- Refinancing causes a hard inquiry which may drop your score 5โ10 points temporarily. However, if you shop multiple lenders within a 14โ45 day window, credit bureaus typically count it as a single inquiry. The long-term impact is minimal if you keep making on-time payments.
- There is no legal limit on how often you can refinance, but most lenders require a seasoning period of 6โ12 months from your last refi or home purchase. Refinancing too often can be costly due to repeated closing costs, so make sure the math makes sense each time.
- A refinance is generally worth it when the new rate is at least 0.75โ1% lower than your current rate. In absolute terms, rates below 6.5% for a 30-year fixed are generally considered competitive as of 2025. Always compare APRs, not just interest rates.
- The key test: (1) Is the break-even point before your planned move-out date? (2) Does the total interest saved exceed closing costs? (3) Does your monthly payment drop meaningfully? If you answer yes to all three, refinancing is likely worth it. Use our calculator for exact numbers.