Refinance Calculator
Calculate if refinancing your mortgage makes financial sense.
Current Loan
How long you've been paying the current loan. Used for remaining-payment and total-savings projections.
New Refinance Loan
Typically 2-5% of loan amount
Refinance Savings
Monthly Savings
$251
About This Calculator
The Refinance Calculator helps you determine if refinancing your mortgage makes financial sense. Compare your current loan with a new refinanced loan to see monthly savings, total savings, and the break-even point for closing costs.
Refinancing can lower your monthly payment, reduce total interest, or shorten your loan term. However, closing costs must be considered. This calculator shows when you'll break even on refinancing costs.
Formula & Calculation Method
Refinance Calculation:
Current Monthly = [P × R1 × (1+R1)^N1] / [(1+R1)^N1 - 1]
New Monthly = [P × R2 × (1+R2)^N2] / [(1+R2)^N2 - 1]
Monthly Savings = Current Monthly - New Monthly
Break-Even = Closing Costs / Monthly Savings
Total Savings = (Remaining Current Payments) - (New Total + Closing Costs)
The break-even point tells you how many months it takes for the monthly savings to equal the closing costs. If you plan to stay in the home longer than the break-even period, refinancing likely makes sense.
How to Use This Calculator
- Enter Current Balance: Input your remaining mortgage balance.
- Enter Current Rate: Input your current mortgage interest rate.
- Enter Current Term: Input your current loan term in years.
- Enter New Rate: Input the new refinance interest rate being offered.
- Enter New Term: Input the new loan term (can be different from current).
- Enter Closing Costs: Input estimated closing costs for refinancing.
- View Results: See monthly savings, break-even point, and total savings.
Frequently Asked Questions
When does refinancing make sense?
Refinancing makes sense if: 1) You can get a rate at least 0.5-1% lower, 2) You'll stay in the home long enough to break even on closing costs, 3) Your credit has improved, 4) You want to change loan terms.
What are typical closing costs?
Closing costs for refinancing typically range from 2-5% of the loan amount. This includes origination fees, appraisal, title insurance, and other fees. Some lenders offer "no-cost" refinancing by rolling costs into the loan or slightly higher rate.
What is the break-even point?
The break-even point is the number of months it takes for your monthly savings to equal the closing costs. If you plan to sell or refinance again before this point, refinancing may not be worth it.
Should I refinance to shorten the loan term?
Shortening the term (e.g., 30 to 15 years) increases monthly payments but saves significant interest. Compare the payment increase vs. interest savings. Make sure you can afford the higher payment.
Expert Reviewed
This calculator was reviewed by NumCalculators Editorial Team, Multi-disciplinary Expert Team