Compare your current mortgage with a new loan, see your monthly savings, and find the break-even month where the refinance pays for its closing costs.
Informational only — not financial advice. This calculator provides general estimates for educational purposes and does not account for every factor in your situation. It is not financial, investment, tax, or legal advice. Figures are estimates and may not reflect current rates. Consult a qualified professional before making financial decisions.
Refinancing replaces your existing mortgage with a new one — ideally at a lower rate. The catch is closing costs: you pay them up front, so a refinance only makes sense if you keep the loan long enough to recoup those costs through lower payments. That point in time is the break-even.
This calculator amortizes both your current loan and the proposed new loan, subtracts the payments to find your monthly savings, then divides your closing costs by that savings to find the break-even month. If you plan to sell or refinance again before break-even, the refinance likely costs you money.
Refinancing a loan you're several years into back out to a fresh 30-year term lowers the payment but can increase total lifetime interest, because you're stretching the balance over more years. Compare the "lifetime interest" lines, not just the monthly payment. A lower rate on a longer term isn't automatically cheaper overall.