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See if refinancing saves money: compare current vs new mortgage payment, monthly savings and break-even months after closing costs.
See if refinancing saves money: compare current vs new mortgage payment, monthly savings and break-even months after closing costs.
Enter values above and click Calculate — results will appear here with the formula explained.
This compares your current remaining mortgage payment to a new mortgage for the same balance but new rate and term, assuming you refinance the full remaining balance and roll costs separately. Monthly savings is current payment minus new payment; break-even is closing costs divided by monthly savings. That simple division is the decision in miniature: every month past break-even earns the savings, every month before it is still repaying the cost of the deal itself.
A longer new term lowers payment but may increase total interest — check total cost, not just payment. Refinancing a $280,000 balance with 25 years left at 7% into a new 30-year loan at 6% cuts the payment by about $300 but restarts the amortization clock: five extra years of payments can add tens of thousands in lifetime interest even at the lower rate. Always compare remaining interest on the current loan against total interest on the new one, not payment against payment.
Rate-and-term refinance (same balance, better terms) is only one flavor. Cash-out refinance pulls equity as cash at mortgage rates — cheaper than most debt but resetting secured debt against your home. Cash-in refinance (bringing money to closing) can erase PMI or hit a better rate tier. Streamline programs (FHA/VA) cut paperwork and costs for eligible borrowers. Each has different break-even math; this calculator models rate-and-term, the most common case.
Closing costs decide more deals than rates do. Lender fees, title, appraisal and prepaid items typically run 2–5% of the loan — $4,000–$10,000 on a $280,000 balance. 'No-closing-cost' offers aren't free: the costs hide in a higher rate (lender credits) or a bigger balance (rolled-in costs that then accrue interest themselves). This model treats costs as cash paid separately — the conservative view — so financed-cost deals look slightly better in reality than shown here.
Timing rules of thumb: many planners suggest refinancing when you can drop the rate ~0.75–1%+ AND break even well within your ownership horizon (commonly under 24–36 months), with stable income and credit intact. Avoid refinancing shortly before selling or when the new term stretches far past your plans — the cruelest outcome is paying $6,000 in costs to save $200/month for 14 months before moving.
Use the CFPB refinance checklist discipline: compare APR (not just note rate), lock terms in writing, budget the appraisal gap, and confirm prepayment terms on the old loan. Then run this calculator's three outputs — new payment, monthly savings, break-even months — against your honest move/tenure horizon. If break-even exceeds how long you will stay, refinancing may not pay.
See if refinancing saves money: compare current vs new mortgage payment, monthly savings and break-even months after closing costs. Formula: Payment = P*r*(1+r)^n/((1+r)^n-1). Example: With $280k balance, 7% for 25y left, payment about $1,979.
This compares your current remaining mortgage payment to a new mortgage for the same balance but new rate and term, assuming you refinance the full remaining balance and roll costs separately. Monthly savings is current payment minus new payment; break-even is closing costs divided by monthly savings. That simple division is the decision in miniature: every month past break-even earns the savings, every month before it is still repaying the cost of the deal itself.
A longer new term lowers payment but may increase total interest — check total cost, not just payment. Refinancing a $280,000 balance with 25 years left at 7% into a new 30-year loan at 6% cuts the payment by about $300 but restarts the amortization clock: five extra years of payments can add tens of thousands in lifetime interest even at the lower rate. Always compare remaining interest on the current loan against total interest on the new one, not payment against payment.
Rate-and-term refinance (same balance, better terms) is only one flavor. Cash-out refinance pulls equity as cash at mortgage rates — cheaper than most debt but resetting secured debt against your home. Cash-in refinance (bringing money to closing) can erase PMI or hit a better rate tier. Streamline programs (FHA/VA) cut paperwork and costs for eligible borrowers. Each has different break-even math; this calculator models rate-and-term, the most common case.
Closing costs decide more deals than rates do. Lender fees, title, appraisal and prepaid items typically run 2–5% of the loan — $4,000–$10,000 on a $280,000 balance. 'No-closing-cost' offers aren't free: the costs hide in a higher rate (lender credits) or a bigger balance (rolled-in costs that then accrue interest themselves). This model treats costs as cash paid separately — the conservative view — so financed-cost deals look slightly better in reality than shown here.
Timing rules of thumb: many planners suggest refinancing when you can drop the rate ~0.75–1%+ AND break even well within your ownership horizon (commonly under 24–36 months), with stable income and credit intact. Avoid refinancing shortly before selling or when the new term stretches far past your plans — the cruelest outcome is paying $6,000 in costs to save $200/month for 14 months before moving.
Use the CFPB refinance checklist discipline: compare APR (not just note rate), lock terms in writing, budget the appraisal gap, and confirm prepayment terms on the old loan. Then run this calculator's three outputs — new payment, monthly savings, break-even months — against your honest move/tenure horizon. If break-even exceeds how long you will stay, refinancing may not pay.
With $280k balance, 7% for 25y left, payment about $1,979. Refinancing to 6% for 30y: payment about $1,679, saving $300/mo. With $4k costs, break-even in about 13 months. The lifetime view: the old loan's remaining interest is roughly $314,000 while the new 30-year loan totals about $324,000 in interest — the monthly win is real, but the longer clock nearly erases it, which is exactly why total-interest comparison matters.
Last reviewed: September 2026 · Report an error