Refinance Calculator
Compare your current loan against a new one and see how long it takes to break even.
Your Details
How It Works
- Enter your current loan balance, rate, and years remaining.
- Enter the new rate, term, and expected closing costs.
- Press Calculate to compare and see your break-even point.
Formula Used
Good to Know
- • A lower rate doesn't always mean lower lifetime interest.
- • Resetting to a new 30-year term extends your payoff date.
- • Moving before break-even usually means refinancing didn't pay off.
Important Notes
- • Closing costs vary by lender and loan size.
- • This estimate excludes any cash-out amount.
- • Consult a loan officer for a formal comparison.
Reading the Break-Even Point
The break-even point is how many months it takes for your monthly savings to cover the closing costs of the new loan. If you plan to stay in the home well past that point, a refinance is usually worth it. If you might sell or move sooner, the savings may never fully offset what you paid to refinance in the first place.
Watch the Total Term, Not Just the Payment
Refinancing into a new 30-year term after already paying down several years of your current loan can lower the monthly payment noticeably — but it also resets the clock, so you may end up paying interest for longer overall, even at a better rate. Comparing "Interest Saved" above against the extra years added is the more complete picture than looking at monthly payment alone.
The Language of This Calculator
- Break-even point — how many months of monthly savings it takes to recover the closing costs of refinancing.
- Rate-and-term refinance — refinancing to change the interest rate and/or term without taking out cash.
- Cash-out refinance — refinancing for more than the current balance, taking the difference in cash.
- Closing costs — lender and third-party fees to originate the new loan, typically 2-5% of the loan amount.
A Sample Calculation: Refinancing a $320,000 Balance
Say the current loan has a $320,000 balance, 27 years remaining at 7.2%, and the new loan offers 6.0% over a fresh 30-year term, with $4,500 in closing costs.
New payment (6.0%, 30 yrs) ≈ $1,919/month
Monthly savings ≈ $390
Break-even = $4,500 ÷ $390 ≈ 11.5 months
If you plan to stay in the home well past 12 months, the refinance pays for itself quickly — but resetting to a fresh 30-year term also means paying interest for 3 extra years compared to the original 27 remaining, which is worth weighing against the monthly savings alone.
Rate Comparison Table
On a $320,000 balance, comparing monthly payment across possible new rates:
| New Rate | New Payment (30yr) |
|---|---|
| 5.5% | $1,817 |
| 6.0% | $1,919 |
| 6.5% | $2,022 |
Errors People Often Make When Refinancing
- Only looking at the new monthly payment — resetting the term can add years of extra interest even at a lower rate.
- Not shopping multiple lenders — closing costs and rates vary between lenders.
- Refinancing too close to a planned move — you may not stay long enough to recoup closing costs.
- Ignoring the new loan's term reset — see the break-even and total-term guidance above.