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Refinance Calculator
Compare your current loan with a refinance offer to see whether lower payments, lower interest cost, or a different term actually justify the closing costs.
New monthly payment
$1,871.26
Monthly savings
$161.28
Lifetime savings
$43,883.73
Break-even
27.9 mo
EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.
Results are informational only. For financial, tax, legal, medical, construction, or other high-impact decisions, verify the output against primary sources or a qualified professional.
Learn more about our review process on the EveryCalc methodology page.
Calculation notes and example
Refinance payment, interest, and break-even formulas
The calculator applies the fixed-payment amortization formula to the same balance under the current rate and remaining term, then the proposed rate and new term. Monthly savings equal current payment minus new payment. Lifetime savings equal remaining current-loan interest minus proposed-loan interest and closing costs. Simple break-even months equal closing costs divided by positive monthly savings. This full-term comparison assumes costs are paid separately, no cash is taken out, and neither loan is prepaid.
Rate-and-term refinance example
On a $285,000 balance, changing from 7.10% with 25 years left to 6.20% for 25 years lowers modeled principal and interest by about $170 per month. With $4,500 of closing costs, simple break-even is roughly 26 months. Selling or refinancing again before then may prevent the payment savings from recovering the upfront cost.
Make the offers comparable
- Enter the current remaining term, not the original term, and compare against the new term you are actually considering.
- Add lender, title, appraisal, recording, and point costs that are not true prepaids; financed costs require increasing the proposed balance.
- Lifetime savings is not a holding-period result. For a shorter horizon, compare balances, payments, and costs through the expected exit date.
Useful companion tools: Mortgage Calculator, Closing Cost Calculator, APR Calculator, and HELOC Calculator.
How to interpret the refinance result
Best use
Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.
Cross-check
Compare the answer with the contract, lender estimate, tax form, brokerage statement, payroll record, or invoice that will control the real-world outcome.
Watch for
Do not rely on a single optimistic rate, return, or fee assumption. Money pages work best when you run low, base, and high cases and keep professional advice separate from the estimate.
This page belongs to the Finance calculator library, so the answer should be read in the context of the decision you are modeling rather than as a universal rule.
Before relying on this refinance estimate
Most calculator mistakes come from the inputs, not the arithmetic. Use this short audit before you reuse the answer in a spreadsheet, quote, application, or important conversation.
Confirm source numbers
Match balances, rates, fees, taxes, income, and payment dates against the lender quote, payroll record, tax form, statement, invoice, or contract.
Separate cash flow from total cost
A lower monthly payment can still cost more over time if fees, interest, taxes, or a longer term are hidden in the structure.
Run conservative cases
Test at least one higher-cost or lower-return case before using the output for a purchase, refinance, investment, loan, or tax decision.
Rerun this page when the rate, price, term, fee, tax rule, income, expense, or expected holding period changes.
Sources used for this calculator
These primary or official references help define the rules, terminology, safety checks, or source documents behind this estimate. Source links were checked in July 2026. They do not turn the calculator output into a quote, appraisal, tax determination, or professional opinion.
- Loan Estimate explainer
Consumer Financial Protection Bureau
Use the lender's Loan Estimate to verify payment, APR, taxes, insurance, closing costs, and cash-to-close inputs.
How to Use
- Enter your remaining balance, current rate, and the years left on the existing loan.
- Add the proposed refinance rate and the new term you are considering.
- Include closing costs so the comparison reflects the real upfront cost of replacing the loan.
- Review the new payment, monthly savings, lifetime cost change, and break-even point before deciding whether the refinance is worth it.
Frequently Asked Questions
What is refinance break-even?
Break-even is the number of months it takes for your monthly payment savings to recover the closing costs of the new loan.
Does a lower payment always mean the refinance is better?
No. A lower payment can come from stretching the term, and a longer term may still increase total interest even if the monthly payment looks better.
Should I always include closing costs?
Yes. Closing costs reduce the benefit of refinancing and can make a seemingly attractive rate drop less valuable than it first appears.
When does refinancing usually make the most sense?
It often makes the most sense when you can lower the rate meaningfully, keep a reasonable term, and expect to hold the loan long enough to pass the break-even point.
Can I use this for auto or personal loans?
Yes. The underlying math works for many fixed-rate installment loans, not just mortgages.
Related Calculators
Refinance Break-Even Calculator
Translate the payment savings into a break-even month and compare it to your expected hold period.
Refinance Closing Cost Calculator
Build up the lender-side fees, prepaids, and escrow funding that feed the refinance comparison.
Mortgage Recast Calculator
Compare a lump-sum recast that keeps the current loan against replacing it with a refinance.
Cash-Out Refinance Calculator
Model pulling equity at the same time you replace the loan.
APR Calculator
Check whether lender fees make the new offer less attractive than the headline rate suggests.
Mortgage Calculator
Run a fresh payment estimate if you are comparing loan structures from scratch.
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