About the Refinance Calculator
Refinancing means replacing your current loan with a new one, usually to get a lower rate or change the term. It can save money, but only if the savings are larger than the costs of switching. This refinance calculator compares your current mortgage with a new one. It works out both monthly payments, the monthly saving, how many months it takes for that saving to repay the closing costs, and the total interest on each loan. You can pay the closing costs in cash or add them to the new loan, and see how the choice changes the numbers.
Updated October 2026
How to use the Refinance Calculator
- 1Enter your current balance, current rate and the months left on the loan.
- 2Enter the new rate and the new loan term in months.
- 3Enter the closing costs and choose whether to pay them now or add them to the loan.
- 4Read the new payment, the monthly saving and the break-even time.
- 5Check the total interest and the saving over the whole life of the loans.
Reading the results
Start with the monthly saving. If it is zero or negative, the new loan does not lower your payment, though it may still shorten the term. Then look at the break-even months. Next check the total of remaining payments against the total of new payments plus any cash costs: this shows whether you are better off at the end, if you keep both loans to their full term. Moving house before break-even means you lose the costs.
Reasons to refinance other than a lower rate
- Switching from an adjustable rate to a fixed rate for certainty
- Shortening the term to pay the loan off sooner
- Removing mortgage insurance once you have enough equity
- Taking cash out for home improvements, with care
- Combining a first and second mortgage
Related tools
The Mortgage Calculator and Amortization Calculator show the schedule for a loan, the Loan Calculator handles any borrowing, the Home Equity Loan Calculator looks at borrowing against your home, and the Interest Rate Calculator finds an unknown rate. This calculator gives estimates for comparison and is not financial advice.
Features
- Current and new monthly payments
- Monthly saving
- Break-even time for closing costs
- Closing costs paid in cash or rolled into the loan
- Total interest on each loan
- Saving over the full life of the loans
- Runs in your browser
Frequently asked questions
How do I know if refinancing is worth it?
Compare the monthly saving with the closing costs. Divide the costs by the monthly saving to get the number of months to break even. If you expect to keep the home longer than that, refinancing is likely to pay off. A common warning sign is a break-even time of more than three or four years.
What are typical closing costs for a refinance?
They commonly run from 2 to 5 percent of the loan amount and include lender fees, appraisal, title charges and recording costs. Get a loan estimate from each lender and enter the total. Some lenders offer no-closing-cost loans, which usually come with a higher rate.
Should I roll the closing costs into the loan?
It saves cash now, but you pay interest on those costs for the life of the loan, so the total cost is higher. Paying in cash is cheaper in the long run if you can afford it. The calculator shows both so you can compare.
Does a longer new term always lower my payment?
Yes, a longer term lowers the monthly payment, but it usually raises the total interest. If you have 20 years left and refinance into a new 30-year loan, your payment falls but you pay for ten more years. Use a term that matches the time you have left to compare fairly.
What rate drop makes refinancing worthwhile?
An old rule says a drop of one percentage point, but it depends on your balance and costs. On a large loan, half a point can pay back quickly. On a small loan, even a full point may not cover the fees. The break-even figure is a better guide than a rule of thumb.
Does this include taxes and insurance?
No. It compares principal and interest only, because taxes and insurance usually stay the same after a refinance. It also doesn't include any cash taken out, or mortgage insurance changes. Ask your lender for a full estimate.