Refinance Calculator
See if refinancing your mortgage makes sense
Last updated: January 2025
Refinancing Makes Sense!
You'll save $9,647.91 over the loan
About This Tool
The refinance calculator helps you determine if refinancing your mortgage makes financial sense. By comparing your current loan to potential new terms, you can see your monthly savings, break-even point, and total lifetime savings.
What is Mortgage Refinance Calculator?
Refinancing means replacing your existing mortgage with a new loan, typically to get a lower interest rate, change the loan term, or access home equity. This calculator compares your current mortgage to a new loan to determine if the switch is worth the closing costs.
How It Works
The calculator compares your current monthly payment and remaining total cost to a new loan with different terms. It factors in closing costs to calculate how long it takes to break even on the refinance costs through monthly savings. It also shows your total lifetime savings.
Formula
Break-Even = Closing Costs / Monthly Savings; Total Savings = (Current Total - New Total) - Closing Costs
Current Loan
Current Payment
$1,847.48/mo
New Loan
New Payment
$1,498.88/mo
Monthly Savings
$348.6
Break-Even
15 months
Lifetime Savings
$9,647.91
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When to Use This Calculator
- 1When interest rates drop significantly below your current rate
- 2To shorten your loan term and pay off your home faster
- 3To lower monthly payments when facing financial pressure
- 4When your credit score has improved substantially
- 5To switch from an adjustable-rate to fixed-rate mortgage
Pro Tips
- •The general rule is refinancing makes sense when you can reduce your rate by 0.5-1%
- •Consider the break-even period - how long you need to stay to recoup costs
- •Shorter loan terms mean higher payments but significant interest savings
- •You can refinance without resetting to 30 years - choose a term that works
- •Shop multiple lenders - rates and fees vary significantly
Common Mistakes to Avoid
- •Refinancing repeatedly and never reaching break-even
- •Extending your loan term and paying more interest over time
- •Only looking at monthly payment without considering total cost
- •Not shopping around for the best rates and lowest fees
- •Refinancing when you plan to move before reaching break-even