Mortgage Refinance Calculator – See How Much You Can Save

Refinancing means replacing your current mortgage with a new loan — usually at a lower interest rate or better terms.

Homeowners refinance to:

• ✔ lower monthly payments
• ✔ reduce interest costs
• ✔ shorten loan term
• ✔ remove PMI
• ✔ take cash out

But refinancing also comes with closing costs, so it's important to calculate savings first.

How This Refinance Calculator Works

Our calculator compares:

Your current loan

• remaining balance
• interest rate
• monthly payment
• remaining years

Your new loan

• new interest rate
• new term
• closing costs

Then we calculate:

• 👉 new monthly payment
• 👉 total interest savings
• 👉 lifetime savings
• 👉 break-even time

So you know exactly if refinancing is smart.

Example Scenario

Let's say:

Current loan:

• Balance: $300,000
• Rate: 7%
• Payment: $1,995

New loan:

• Rate: 5.8%
• Closing costs: $6,000

Results:

• New payment: $1,760
• Monthly savings: $235
• Break-even: 26 months
• Total savings: $48,000

That's nearly $50k saved over the loan.

What Is the Break-Even Point?

The break-even point is how long it takes for your monthly savings to cover refinancing costs.

Formula:

Break-even = closing costs ÷ monthly savings

Example:

$6,000 ÷ $235 = 25.5 months

If you plan to stay longer than 26 months → refinancing makes sense.

If you move earlier → you lose money.

This is the most important number.

When Refinancing Makes Sense

Refinancing is usually smart if:

• ✔ rates drop by 0.75–1% or more
• ✔ you plan to stay 3+ years
• ✔ you want lower monthly payments
• ✔ you want to remove PMI
• ✔ you want to shorten the term

These situations often save thousands.

When Refinancing May NOT Be Worth It

Sometimes refinancing doesn't help.

Avoid if:

• ❌ you plan to move soon
• ❌ closing costs are too high
• ❌ small rate difference
• ❌ extending loan too long
• ❌ already near payoff

Always calculate break-even first.

Types of Refinancing

Rate-and-Term Refinance

Lower interest rate or change loan length.

Most common option.

Cash-Out Refinance

Borrow extra cash using home equity.

Good for:

• renovations
• debt consolidation
• large expenses

But increases loan balance.

Short-Term Refinance

Switch 30-year → 15-year.

Higher payment but massive interest savings.

How Much Can You Save by Refinancing?

Even small rate drops make huge differences.

Example:

$300,000 loan
30 years

• 7% → $419k interest
• 6% → $347k interest

Savings = $72,000

Just 1% lower saves life-changing money.

Hidden Costs of Refinancing

Don't forget:

• ✔ appraisal fees
• ✔ lender fees
• ✔ title insurance
• ✔ closing costs
• ✔ points

Typically 2–5% of loan amount.

Always include these in calculations.

Tips to Get the Best Refinance Rate

• ✔ improve credit score
• ✔ compare multiple lenders
• ✔ lower debt-to-income
• ✔ choose shorter term
• ✔ refinance when rates drop

Shopping around can save 0.5–1% easily.

Why Use Our Refinance Calculator?

• ✔ instant savings estimate
• ✔ break-even calculation
• ✔ compare terms easily
• ✔ clear charts
• ✔ no signup
• ✔ completely free
• ✔ built for U.S. homeowners

Know the numbers before you refinance.