Refinance Calculator
Compare your current loan to a new rate and term — see your monthly savings, break-even point, and lifetime interest difference before you refinance.
Monthly Savings
$297.70
Break-Even Point
N/A
Summary
Refinancing $300,000 remaining at 7% into a new 30-year loan at 6% changes the payment from $2,120.34 to $1,822.63 per month — a savings of $297.70/month.
Current Payment
$2,120.34
New Payment
$1,822.63
New Loan Amount
$304,000.00
Lifetime Interest Δ
-$16,046.82
Current vs. new monthly payment
What is a Refinance Calculator?
Refinancing means taking out a new loan, usually with more favorable terms, to pay off an existing one. This calculator compares the cost of continuing your current loan as-is against the cost of refinancing into a new rate and term — factoring in closing costs and any cash you take out — so you can see whether refinancing actually saves you money and, if so, how long it takes to recover the upfront cost.
People refinance for several reasons: to lower their rate and save money, to access home equity through a cash-out refinance, to lower their monthly payment by extending the term, to pay off the loan faster with a shorter term, to consolidate other debt, or to switch from an adjustable to a fixed rate (or vice versa).
Cumulative Cost: Keep vs. Refinance
Where the "Refinance" line crosses below the "Keep Current Loan" line is your break-even point — the moment the new loan's total cost (including closing costs) becomes cheaper than continuing to pay the old one.
How Break-Even Is Calculated
If you roll closing costs into the new loan instead of paying them upfront, there is no simple break-even point in the same sense — the cost is spread across the life of the new loan instead. In that case, compare the total lifetime interest of each option (shown above) rather than looking for a break-even month.
Rate-and-Term vs. Cash-Out Refinance
A rate-and-term refinance simply restructures your remaining balance at a new rate or term without accessing home equity. A cash-out refinance borrows more than you currently owe, with the difference paid to you in cash — useful for consolidating higher-interest debt or funding a large expense, but it increases your loan balance and total interest cost, so it should be weighed against the interest rate on whatever you'd otherwise use to cover that expense.
When a Longer Term Isn't a Free Lunch
Refinancing into a new 30-year term can lower your monthly payment even at a similar rate, simply because you're spreading the balance over more months again. But if you're already 10+ years into your current loan, resetting the clock to 30 years usually increases total lifetime interest paid, even if the rate improves. Compare total interest, not just the monthly payment, before deciding.
Closing Costs to Expect
Typical refinance closing costs run 2–5% of the loan amount and include an application fee, appraisal fee, origination fee (0–2% of the loan), title search and insurance, recording fees, and sometimes points paid to buy down the rate. Rolling these into the new loan avoids an upfront cash outlay but means you pay interest on the closing costs themselves for the life of the loan.
Example — Your Current Inputs
Refinancing $300,000 remaining at 7% into a new 30-year loan at 6% changes the payment from $2,120.34 to $1,822.63 per month — a savings of $297.70/month.
Additional Example — A Rate Drop Refinance
A homeowner has $250,000 remaining on a 30-year mortgage at 7.5%, with 25 years (300 months) left. Rates drop to 6%, so they refinance into a new 30-year loan with $5,000 in closing costs rolled into the balance ($255,000 financed). Their payment drops from about $1,847/month to roughly $1,529/month — a savings of $318/month. Because the closing costs were rolled in rather than paid upfront, there's no simple break-even month; instead, comparing total interest over each path shows whether the lower rate outweighs resetting the clock to a fresh 30-year term.
About These Parameters
- Remaining Balance & Months Remaining
- The outstanding principal and number of payments left on your current loan — found on your most recent mortgage statement. These determine your current monthly payment and the interest you'd pay if you kept the loan as-is.
- New Interest Rate & Term
- The rate and term quoted for the refinanced loan. A shorter new term increases the monthly payment but sharply reduces total interest; a longer term does the reverse.
- Closing Costs
- Fees to originate the new loan, typically 2–5% of the loan amount. Whether you pay these upfront or roll them into the loan changes how "break-even" is measured — see the toggle below the field.
- Cash-Out Amount
- Any additional amount you want to borrow beyond your current balance, typically to access home equity. Leave at $0 for a standard rate-and-term refinance with no cash out.
Frequently Asked Questions
Is it worth refinancing for a 0.5% rate drop?
It depends heavily on closing costs and how long you plan to stay in the loan. A common rule of thumb is that refinancing makes sense if you'll stay past the break-even point calculated above — but with today's rates and fees, some experts suggest a rate drop of at least 0.5–1% before the closing costs are worth it.
Does refinancing reset my equity?
No — refinancing doesn't erase the equity you've built. It replaces your loan, not your ownership. However, a cash-out refinance directly reduces your equity by the amount withdrawn, and resetting to a new 30-year term means you'll build equity more slowly again for the next several years since early payments are interest-heavy.
Will refinancing hurt my credit score?
Applying triggers a hard credit inquiry, which typically causes a small, temporary dip. Multiple refinance applications within a short shopping window (usually 14–45 days depending on the scoring model) are generally counted as a single inquiry, so it's safe to compare several lenders' offers without repeated credit hits.
Can I refinance if I have little or no equity?
Conventional refinances typically require at least some equity (often 3–5% minimum, more for cash-out). Government-backed programs exist for borrowers with limited equity in specific circumstances, such as FHA streamline refinances or VA interest rate reduction loans, but these have their own eligibility rules not modeled by this general-purpose calculator.