Refinance Calculator
Evaluate whether refinancing your loan or mortgage makes financial sense. Model lower interest rates against closing costs to find your exact break-even timeline and net lifetime savings.
Current principal payoff balance
Principal & interest paid currently
Quoted annual interest rate on new loan
Repayment period for the new mortgage
Appraisal, origination, title, and escrow charges
Reduction in monthly debt service
How to Use This Calculator
- Enter your existing unpaid principal loan balance.
- Input your current contractual monthly payment.
- Specify the new loan interest rate and term length.
- Enter total closing costs quoted by the new lender.
- Check your monthly savings and break-even recovery timeline.
Formula & Calculation Methodology
Break-even divides closing expenses by monthly payment reduction to compute the payback horizon in months.
Worked Example
$300,000 balance at $1,950/mo refinanced to 5.5% 30-yr with $4,500 fees
Frequently Asked Questions
What is a good rule of thumb for refinancing?↓
Traditionally, reducing your interest rate by 0.75% to 1.0% with a break-even point under 24 to 36 months justifies refinancing.
What happens if I move before the break-even point?↓
If you sell the home before reaching the break-even month, the upfront closing fees exceed your cumulative savings, resulting in a net financial loss.
Can I refinance without paying closing costs upfront?↓
Yes, in a "no-closing-cost" refinance, the lender rolls fees into the loan balance or charges a slightly higher interest rate to cover costs.
Does refinancing reset my loan clock?↓
Refinancing a loan that has been paid for 10 years into a new 30-year term resets the amortization timeline and may increase total interest if kept long-term.
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Source Citation & Disclaimer
Informational tool only; not licensed tax, legal, or financial advice.