Mortgage Refinance Calculator
Compare your current mortgage to a new loan side by side. See your new monthly payment, your break-even point on closing costs, and the true lifetime interest impact, updated instantly as you type.
The Complete Guide to Refinance Break-Even Analysis
Refinancing can lower your monthly payment, but it always comes with a cost. The only way to know if a refinance actually makes financial sense is to compare what you currently owe against the full picture of the new loan, including the fees you will pay to get it. This calculator does that math for you in real time, but understanding what is happening behind the numbers helps you negotiate better terms and avoid refinances that look good on paper but cost more in the long run.
How to Use This Calculator
Start with the Your Current Mortgage column on the left. Enter your remaining principal balance, your current interest rate, how much time is left on the loan, and your current monthly principal and interest payment. This last figure should not include property taxes, homeowners insurance, or escrow, since those costs do not change based on your loan terms and would distort the comparison.
Next, fill in the Proposed New Loan column on the right with the interest rate and term from your refinance offer. The new loan amount and new monthly payment are calculated automatically using the standard amortization formula, the same math lenders use to generate your official Loan Estimate.
Finally, enter your Total Refinance Closing Costs and choose whether you plan to pay them in cash at closing or roll them into the new loan balance. As soon as every field has a value, the results panel updates instantly, showing your break-even point, your monthly savings, and the full lifetime interest comparison between the two loans.
Why Monthly Savings and Lifetime Savings Can Disagree
A lower monthly payment feels like an obvious win, but it does not always mean you come out ahead overall. If your current mortgage has 18 years remaining and you refinance into a brand new 30-year loan, you are spreading your remaining balance across 12 extra years. Even at a meaningfully lower rate, those extra years of interest can add up to more than what you save each month over the time you actually planned to keep the loan.
This calculator reports both numbers side by side on purpose. Monthly savings tells you about cash flow today. The lifetime interest comparison tells you about the true cost of the decision from this point forward, factoring in the full new term. Neither number is "more correct" than the other; they answer different questions, and which one matters most depends on your personal plans for the home and the loan.
Reading the Break-Even Bar
The visual bar in the results panel shows where your break-even point falls relative to the full length of your new loan term. A break-even point that lands early in the bar means you recoup your closing costs quickly relative to the life of the new loan, which is generally a strong sign. A break-even point that stretches close to or past the end of the bar suggests the closing costs are large relative to your monthly savings, and you should think carefully about how long you realistically expect to keep this loan.
The break-even point is the number of months it takes for the money you save each month with a new, lower payment to equal the total closing costs you paid to get the new loan. Before that point, you are technically still behind on the deal because the upfront fees outweigh what you have saved so far. After that point, every dollar of monthly savings becomes pure benefit.
For example, if your refinance costs $4,500 in closing costs and saves you $150 per month, the break-even point is 30 months, or two and a half years. If you plan to stay in the home and keep the loan longer than your break-even point, the refinance is generally worth it from a cash-flow perspective. If you expect to sell or refinance again before reaching that point, the fees may end up costing you more than you save.
This calculator computes your break-even point automatically by dividing your total closing costs by your monthly savings, and updates instantly as you adjust any input.
It can be, but it depends on the full picture, not just the monthly payment. When you refinance into a new 30-year loan after already paying down several years of your original mortgage, you restart the amortization clock. Even at a lower rate, stretching the remaining balance back out over a longer term can mean you pay more total interest over the life of the loan than if you had kept your original mortgage, even though your monthly payment drops.
This is why this calculator separates two different questions: monthly cash flow (how much you save each month and how quickly that recoups your closing costs) and lifetime cost (how much total interest you will pay from today forward under each scenario, including the full new term). A refinance can lower your monthly payment and still cost you more in total interest if the new term is significantly longer than your remaining term.
If lifetime cost matters more to you than monthly cash flow, consider a shorter new loan term, such as 15 or 20 years, or making extra principal payments on the new loan to offset the extended timeline.
Refinance closing costs typically run between 2% and 6% of the new loan amount and can include a variety of lender and third-party fees. Common items are the loan origination fee charged by the lender for processing and underwriting the loan, an appraisal fee to confirm the home's current value, title search and title insurance fees to confirm clear ownership, a credit report fee, recording fees charged by your county to file the new mortgage, attorney or settlement fees depending on your state, and a survey fee in some areas.
You may also encounter discount points, which are optional upfront fees paid to lower your interest rate, with each point typically costing 1% of the loan amount. Some lenders offer a no-closing-cost refinance, where these fees are folded into a slightly higher interest rate instead of being charged upfront.
When comparing offers, ask your lender for a Loan Estimate that itemizes every fee so you can enter an accurate total into this calculator.
Rolling your closing costs into the new loan balance means you do not pay anything out of pocket at closing, but the costs are not free. Adding them to your principal increases the size of the loan you are amortizing, which slightly raises your new monthly payment compared to paying the costs in cash.
Because your monthly savings are calculated as the difference between your old payment and this new, slightly higher payment, rolling in the costs reduces your monthly savings and therefore lengthens the break-even point compared to paying upfront. In some cases, if the rate improvement is small and the closing costs are large, rolling the costs in can shrink your monthly savings so much that the break-even point becomes very long or the refinance no longer saves you money at all on a monthly basis.
This calculator lets you toggle between paying upfront and rolling costs into the loan so you can see exactly how each choice affects your new payment, your monthly savings, and your break-even timeline side by side.