Compare your current mortgage to a new loan. See monthly savings, break-even point, and total interest saved.
Current Mortgage
New Refinance
Current Monthly Payment
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New Monthly Payment
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Monthly Savings
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Total Interest Saved (over new term)
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Break-Even Point
- months
Time to recover closing costs with monthly savings
Remaining Balance Comparison
📊 Actions
⚠️ Disclaimer: This calculator provides estimates for educational purposes only. Results assume fixed-rate mortgages with level payments. Actual savings may vary based on lender fees, rate locks, and other factors. Calculator Mafia makes no warranties about accuracy.
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Frequently Asked Quentions
1. What is a mortgage refinance calculator and why use it?
A mortgage refinance calculator helps you evaluate whether refinancing your home loan makes financial sense. It compares your current loan’s monthly payment and total interest to a new loan’s terms, factoring in closing costs. It also shows the break‑even point—the time it takes for your monthly savings to recoup the costs.
2. How do I know if refinancing is worth it?
Refinancing is generally worth it if you can lower your interest rate sufficiently (often 0.5–1% or more) and plan to stay in the home long enough to reach the break‑even point. If you expect to move before breaking even, refinancing may not be beneficial.
3. What is the break‑even point in refinancing?
The break‑even point is the number of months it takes for your monthly payment savings to equal the closing costs you paid. After that, every month you stay in the home yields net savings.
4. Does this calculator include cash‑out refinancing?
No, this calculator assumes you refinance your existing balance only (no additional cash out). For cash‑out refinances, you would need to adjust the new loan amount to include the extra cash.
5. What costs should I include for closing costs?
Include lender fees, appraisal, title insurance, recording fees, and any points you pay to lower the rate. If your lender offers a “no‑cost” refinance, those costs are typically rolled into a slightly higher interest rate.
6. Why does the calculator show a break‑even point of “never”?
If the new monthly payment is higher than your current payment, you have no monthly savings, so closing costs will never be recouped. In that case, refinancing is not recommended unless you are switching to a shorter term for other reasons.
7. Can I refinance to a shorter term and still save money?
Yes, refinancing to a shorter term (e.g., 15 years) usually increases your monthly payment but saves substantial interest over the life of the loan. This calculator shows both scenarios so you can compare.
8. How accurate is the interest saved calculation?
The interest saved is calculated based on total interest paid over the remaining life of your current loan vs. total interest on the new loan. It assumes you keep both loans to term. If you sell or pay off early, actual savings differ.
9. Do I need to consider my credit score?
Yes, your credit score significantly affects the interest rate you’ll qualify for. Lenders use credit scores to set rates. Check your score before applying to ensure you get the best possible terms.
10. How often should I use a refinance calculator?
Whenever interest rates drop, when your credit score improves, or when you’re considering a major life change (like moving or taking out equity). Running the numbers regularly helps you spot opportunities.
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What Is a Mortgage Refinance Calculator?
A mortgage refinance calculator helps you compare your current loan against a potential new loan. By entering your current balance, interest rate, remaining term, and the new loan’s rate, term, and closing costs, the calculator shows your new monthly payment, interest savings, and the break‑even point—the time it takes for your monthly savings to cover the closing costs.
📌 Key Insight: Refinancing isn’t always about the lowest rate. You should also consider how long you plan to stay in the home. If you move before the break‑even point, refinancing may cost you money.
How to Use This Mortgage Refinance Calculator
- Enter your current mortgage details: Loan balance, interest rate, and remaining term (years).
- Enter the proposed refinance terms: New interest rate, new loan term, and estimated closing costs.
- Click “Analyze Refinance”: The calculator instantly shows your current and new monthly payments, monthly savings, total interest saved, and break‑even point in months.
- Review the chart: A line graph compares the remaining balance over time for both scenarios.
- Save or share: Use the PDF download or copy results for your records.
Key Formulas:
Monthly Payment = P × [ r(1+r)^n ] / [ (1+r)^n – 1 ]
Monthly Savings = Current Payment – New Payment
Break-Even (months) = Closing Costs ÷ Monthly Savings
Monthly Payment = P × [ r(1+r)^n ] / [ (1+r)^n – 1 ]
Monthly Savings = Current Payment – New Payment
Break-Even (months) = Closing Costs ÷ Monthly Savings
Practical Examples
Example 1: Rate Reduction with Same Term
Current: $225,000 @ 4.5% with 25 years remaining → monthly $1,266
Refinance: 3.5% for 25 years, closing costs $5,000 → new payment $1,126
Monthly savings $140, break‑even in 36 months, interest saved $42,000.
Current: $225,000 @ 4.5% with 25 years remaining → monthly $1,266
Refinance: 3.5% for 25 years, closing costs $5,000 → new payment $1,126
Monthly savings $140, break‑even in 36 months, interest saved $42,000.
Example 2: Shortening Term
Current: $200,000 @ 4.25% with 20 years remaining → monthly $1,240
Refinance: 3.25% for 15 years, closing costs $3,500 → new payment $1,405
Monthly payment increases by $165, but you save $55,000 in interest and pay off 5 years earlier.
Current: $200,000 @ 4.25% with 20 years remaining → monthly $1,240
Refinance: 3.25% for 15 years, closing costs $3,500 → new payment $1,405
Monthly payment increases by $165, but you save $55,000 in interest and pay off 5 years earlier.
When Refinancing Makes Sense
- Interest rates have dropped significantly. A rule of thumb: at least 0.5–1% lower than your current rate.
- You plan to stay in the home long enough to reach the break‑even point. The longer you stay, the more you save.
- You want to switch from an adjustable‑rate mortgage (ARM) to a fixed rate.
- You need to eliminate private mortgage insurance (PMI). If your home value has increased, refinancing may remove PMI.
⚠️ Important Considerations: This calculator does not include cash‑out refinancing (where you borrow more than your current balance). It also assumes you pay closing costs upfront. If you roll costs into the loan, the new balance increases, and break‑even takes longer.
Common Mistakes to Avoid
❌ Mistake 1: Ignoring closing costs. Even a “no‑cost” refinance usually has costs rolled into the rate. Always compare total costs.
❌ Mistake 2: Resetting the term to 30 years without considering how long you’ll stay. You may pay more interest overall if you don’t shorten the term or make extra payments.
❌ Mistake 3: Not shopping with multiple lenders. Rates and fees vary significantly. Get at least three quotes.
Refinance Comparison Table
| Scenario | Current Payment | New Payment | Monthly Savings | Break-Even (Months) |
|---|---|---|---|---|
| $250k, 30yr, 5% → 4% | $1,342 | $1,193 | $149 | 34 |
| $200k, 20yr, 4.5% → 3.5% | $1,265 | $1,160 | $105 | 38 |
| $180k, 15yr, 3.75% → 3.0% | $1,309 | $1,243 | $66 | 45 |
*Closing costs assumed $5,000 in each scenario. Actual results vary.
📌 Final Thoughts
Refinancing can be a powerful financial tool, but it requires careful analysis. Use our calculator to compare numbers, but also consider your long‑term plans, your credit score, and the overall market. A small rate drop might not justify the closing costs if you’re moving soon. Run the numbers, talk to lenders, and make an informed decision.
Refinancing can be a powerful financial tool, but it requires careful analysis. Use our calculator to compare numbers, but also consider your long‑term plans, your credit score, and the overall market. A small rate drop might not justify the closing costs if you’re moving soon. Run the numbers, talk to lenders, and make an informed decision.
Calculator Mafia provides this tool for educational and informational purposes only. Results are estimates and should not be relied upon as financial advice. Always verify with a qualified professional and your lender before refinancing.