Compare a current mortgage's payment against what refinancing into a new rate and term would actually cost and save, after accounting for closing costs.
How to Use the Refinance Calculator
Fill in the current loan's balance, rate, and remaining years on the left, the new loan's rate, term, and closing costs on the right. The calculator compares the two payments directly and works out how many months of savings it takes to recover what refinancing costs upfront.
Refinancing only makes sense once the new payment is genuinely lower than the old one after accounting for what it costs to get there. This calculator assumes a straightforward rate-and-term refinance of the current balance — no cash taken out — and prices both loans on identical math:
M = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1]Run the current balance through that formula twice — once at the old rate and remaining term, once at the new rate and new term — and the difference is the monthly savings. Divide the closing costs by that savings and the result is the break-even point: how many payments have to land before the refinance has paid for itself.
If the new payment isn't actually lower, there's no break-even point to calculate, and the calculator says so rather than showing a meaningless negative number.
Total Interest Is a Trap Here
A common mistake is comparing the total interest paid over the life of each loan and picking whichever number is smaller. That comparison quietly breaks the moment the two loans run different lengths. Refinance a loan with 25 years left into a new 30-year term at a lower rate, and the new loan can easily show more total interest paid — simply because it's spread over more years — while still cutting the monthly payment substantially and clearing its break-even point in under two years. The lifetime-interest number answers "how much interest total," which isn't the question that determines whether refinancing was the right call; the monthly cash flow and the break-even timeline are. Judge the move on those, and treat a side-by-side lifetime-interest comparison across different terms with real suspicion.