Mortgage Refinance Calculator

Should You Refinance Your Mortgage?

Refinancing replaces your existing mortgage with a new one — ideally at a lower interest rate, different term, or both. The core trade-off is simple: you pay closing costs today in exchange for lower monthly payments or less total interest over time. Whether that trade-off is worth it depends on how long you plan to stay in the home and how quickly the monthly savings pay back the upfront cost. This calculator shows you the exact break-even month and your net savings or cost over the full life of both loans.

What Is the Break-Even Point?

The break-even point is the number of months it takes for your cumulative monthly savings to equal your closing costs. If you plan to stay in your home longer than the break-even, refinancing makes financial sense. If you're likely to move or sell before that point, you'll lose money on the refi. A break-even of 24 months or less is generally considered excellent. Beyond 60 months (5 years) you should think carefully about your plans before refinancing.

The Hidden Cost of Resetting Your Term

One of the most overlooked refinance traps is resetting your loan term. If you have 22 years left on a 30-year mortgage and refinance into a new 30-year loan, your monthly payment drops — but you've just added 8 years back to your payoff timeline. Even at a lower rate, you can end up paying more total interest because you're paying for so much longer. This calculator surfaces that trade-off directly in the comparison table so you can see the full picture.

Rate-and-Term vs. Cash-Out Refinance

A rate-and-term refinance simply changes your interest rate, loan term, or both — your loan balance stays roughly the same. A cash-out refinance lets you borrow more than you owe and take the difference as cash, which increases your loan balance and monthly payment. Cash-out refis are useful for home improvements or paying off high-interest debt, but they slow your equity buildup. This calculator handles both — enter a cash-out amount greater than zero to model a cash-out scenario.

How to Use This Calculator

• Enter your current loan balance, interest rate, and monthly P&I payment (not including taxes or insurance).
• Enter the number of months remaining on your current loan — e.g. 26 years left = 312 months.
• Enter the new interest rate and term being offered.
• Enter your estimated closing costs — typically 2–5% of the loan amount. Your lender should provide a Loan Estimate.
• If you're doing a cash-out refinance, enter the cash-out amount.
• Choose whether to pay closing costs upfront or roll them into the new loan.
• Click Calculate Refinance to see your break-even, monthly savings, and full loan comparison.

This calculator is for educational purposes only and does not constitute financial advice. Consult a mortgage professional before making refinancing decisions.