Mortgage Refinance Calculator

Mortgage refinancing replaces your existing home loan with a new one, typically to secure a lower interest rate, reduce monthly payments, change the loan term, or tap into home equity. The decision hinges on whether the financial benefits — primarily monthly savings — outweigh the closing costs before you sell or pay off the loan.

The key concept is the break-even point: how many months it takes for your monthly savings to recoup the closing costs of refinancing. If you plan to stay in your home past the break-even point, refinancing makes financial sense. If you plan to move before then, it likely does not.

The calculation is straightforward:

Break-Even (months) = Total Closing Costs ÷ Monthly Payment Savings

For example, if refinancing costs $4,500 in closing costs and reduces your monthly payment by $150, the break-even is 30 months (2.5 years). If you stay in the home longer than 30 months after refinancing, you come out ahead.

This calculator also computes total lifetime savings — the difference between what you would pay on the old loan versus the new loan over their respective remaining terms.

• Lower interest rate: The most common reason. Even a 0.5–1% rate reduction can save tens of thousands over the loan life.
• Shorter loan term: Refinancing from a 30-year to a 15-year mortgage increases monthly payments but dramatically reduces total interest paid and builds equity faster.
• Remove PMI: If your home has appreciated and you now have 20%+ equity, refinancing can eliminate Private Mortgage Insurance.
• Switch loan type: Moving from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage provides payment stability.
• Cash-out refinance: Borrow against home equity for renovations, debt consolidation, or other large expenses.

Refinancing is not free. Closing costs typically range from 2–5% of the loan amount and may include:

• Loan origination fee (0.5–1% of loan amount)
• Appraisal fee ($300–$700)
• Title search and insurance ($700–$1,500)
• Attorney fees (varies by state)
• Recording fees ($25–$250)
• Points (optional, prepaid interest to lower your rate)

Some lenders offer "no-closing-cost" refinances where costs are rolled into the loan balance or offset by a slightly higher rate. These can make sense if you plan to sell or refinance again within a few years.