Compare your current mortgage with a refinanced loan and find your break-even point
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Enter a valid balance (1,000-10,000,000)
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Enter a valid rate (0.01-25)
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Enter a valid term (1-50)
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Enter a valid rate (0.01-25)
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Enter a valid term (1-50)
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Enter valid closing costs (0-100,000)
Monthly Savings
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Compare your current and new monthly payment
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Current Payment
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New Payment
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Break-even
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Interest Saved
Current Monthly Payment--
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Monthly Difference--
Closing Costs--
Break-even Time--
Total Interest Saved--
Mortgage Refinance Calculator — Complete Guide
What this calculator does
The Mortgage Refinance Calculator answers a single, practical question: if you replace your current mortgage with a new one, how much will you actually save, and how long will it take to recover the cost of doing it? You enter your remaining loan balance, your current rate and remaining term, the rate and term of the new loan you are being offered, and the closing costs you would pay to switch. The tool then computes both monthly payments and the difference between them.
Refinancing is not automatically good news. A lower rate reduces your payment, but closing costs are paid up front, and a longer new term can quietly increase the total interest you pay over the life of the loan. This calculator makes those trade-offs visible by showing your monthly savings, the break-even point in months, and the total interest you would save or lose.
The formula
M = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)
r = annual rate ÷ 12 ÷ 100
n = years × 12
monthly savings = current payment − new payment
break-even months = closing costs ÷ monthly savings
interest saved = current total interest − new total interest
Both payments use the standard amortizing loan formula, so each one already includes principal and interest. Because the same balance is amortized over a possibly different number of months, the new payment reflects both the new rate and the new term. A longer term lowers the payment but spreads the balance over more months, which is why the interest comparison matters as much as the monthly figure.
A worked example
You owe $250,000 at 6.5% with 25 years left. A lender offers a new loan at 5.25% amortized over 25 years, with $4,000 in closing costs.
Current payment: about $1,687 per month
New payment: about $1,497 per month
Monthly savings: about $190
Break-even: $4,000 ÷ $190 ≈ 22 months
In this scenario the homeowner recovers the closing costs in under two years and saves roughly $190 every month thereafter — a strong case for refinancing, provided they stay in the home past the break-even point.
When refinancing is worth it
Compare the break-even point with how long you plan to keep the home. If you may sell before break-even, the savings never materialise.
A shorter new term can raise your payment slightly but cut total interest dramatically; check the interest-saved figure, not just the monthly difference.
Closing costs can often be rolled into the loan, but that increases the balance and the interest you pay; the calculator uses them as an up-front cost.
Property taxes, homeowners insurance and mortgage insurance are not part of this model — add them separately if you want a full monthly housing cost.
It is the number of months it takes for your monthly savings to equal the closing costs you paid. After that point, every month lowers your total cost.
When does refinancing make sense?
Usually when you can lower your rate enough that the monthly savings recover the closing costs well before you plan to sell or pay off the home.
Does this include taxes and insurance?
No. The calculator covers principal and interest only. Add property taxes, homeowners insurance and any mortgage insurance separately for a full monthly cost.