Mortgage Refinance Calculator — Should You Refinance?
Refinancing can cut your payment — but closing costs can eat the savings if you sell or move too soon. This calculator compares your current mortgage to a new one, subtracts the refinancing costs, and shows the break-even month (when savings overtake costs) plus your total lifetime saving.
Extending the term lowers the payment but can raise lifetime interest — watch the total-interest row.
How to use this tool
- Enter your remaining balance and current rate and years left.
- Enter the new rate you've been offered and the new term.
- Add the closing/refinancing costs the lender quoted.
- Check the break-even month — if you'll stay past it, refinancing usually makes sense.
Frequently asked questions
When is refinancing worth it?
The classic rule of thumb: if you can drop your rate by 0.75–1% or more and you'll stay in the home past the break-even month, it's usually worth it. The break-even is closing costs ÷ monthly saving — beyond that point, every month is pure gain.
Does a lower payment always mean I'm saving money?
No — a big trap. Refinancing a loan with 20 years left into a fresh 30-year loan lowers the payment but can increase total interest by stretching it out. Watch the 'lifetime difference' row; a lower monthly payment with higher total cost is only worth it if you specifically need cash-flow relief.
What are typical refinancing costs?
Commonly 2–5% of the loan amount — appraisal, origination, title and legal fees. Some lenders offer 'no-cost' refinances that roll fees into a slightly higher rate; run both scenarios in this tool to see which really wins for your timeline.
Should I refinance to a shorter term?
If you can afford the higher payment, refinancing from 30 to 15 years at a lower rate can save an enormous amount of interest and build equity fast. Enter a shorter new term to see the lifetime saving — it's often dramatic.
Will refinancing hurt my credit?
The lender's hard inquiry causes a small, temporary dip, and opening a new loan lowers your average account age slightly. Both effects are minor and short-lived compared to the potential interest savings.