Refinance Calculator - Break-Even, Monthly Savings & Lifetime Interest
A refinance calculator compares your current loan against a new rate and term to show monthly savings, closing costs, and break-even time. If you owe $280,000 at 7.25% with $1,910/month and refinance to 6.25% with $4,500 closing costs, monthly savings of about $165 break even in roughly 27 months. Enter your balance, payment, and new terms to see if refinancing pays off.
Current Loan
Details about your existing mortgage.
Enter remaining months, e.g. 300 for 25 years.
New Loan
Terms for the refinanced loan.
Refinance Analysis
Should you refinance?
Worth refinancing
You save $4,857 over the life of the loan.
New Monthly Payment
$1,724
+$376/mo vs current
Break-even Point
You break even after 12 months (1 year)
Methodology and limitations
Last reviewed:
Methodology
Compares remaining current-loan cost with refinance payment, new term, closing costs, break-even point, and estimated lifetime savings.
Limitations
Does not include every lender fee, escrow change, tax effect, lender credit, property-specific cost, or future rate/servicing change.
Official sources
How to Use the Refinance Calculator - Break-Even, Monthly Savings & Lifetime Interest
A refinance calculator compares your current loan against a new rate and term to show monthly savings, closing costs, and break-even time. If you owe $280,000 at 7.25% with $1,910/month and refinance to 6.25% with $4,500 closing costs, monthly savings of about $165 break even in roughly 27 months. Enter your balance, payment, and new terms to see if refinancing pays off.
Method used
This calculator compares the remaining cost of the current loan with a new refinance loan, including monthly savings, closing costs, break-even time, and lifetime savings.
Practical example
Example: enter a current balance, current payment, 300 months remaining, and a lower new rate to see whether closing costs are recovered before payoff.
What this includes
- Includes new payment, monthly savings, break-even estimate, and lifetime savings.
- Supports upfront or rolled-in closing-cost comparisons.
What this excludes
- Does not include escrow refunds, tax effects, lender credits, or property-specific fees.
Frequently Asked Questions
How is refinance break-even calculated?
Refinance break-even is the number of months it takes for monthly savings to recover your upfront closing costs. Divide total closing costs by the difference between your current monthly payment and the new refinanced payment. For example, $5,000 in closing costs divided by $285 in monthly savings equals roughly 18 months to break even. If you sell or refinance again before that point, you may not recover the costs. This calculator estimates break-even alongside lifetime interest savings.
Should I roll closing costs into the new loan?
Rolling closing costs into the new loan reduces the cash you need at closing, which can make refinancing more accessible. However, it increases your loan balance, which raises both your monthly payment and total interest paid over the life of the loan. On a 30-year mortgage, financing $5,000 in closing costs can add thousands in interest. Compare both scenarios in this calculator - paying costs upfront versus rolling them in - before deciding.
When is refinancing worth it?
Refinancing is generally worth considering when you can secure a meaningfully lower interest rate, reduce your monthly payment, or shorten your loan term while keeping payments affordable. The refinance should produce positive lifetime savings and you should plan to keep the loan past the break-even point. Common triggers include rate drops of 0.75% or more, improved credit score, or switching from an adjustable to a fixed rate. Always compare total interest, not just monthly payment.
Does this include taxes or escrow changes?
No. This calculator focuses on loan payment, closing costs, and interest savings between your current loan and the refinance option. Property tax reassessments, homeowners insurance premium changes, escrow account adjustments, lender credits, and prepaid interest at closing can all affect your actual out-of-pocket cost. Request a Loan Estimate from your lender for a complete picture of refinance costs before committing.
How much can I save by refinancing my mortgage?
Savings depend on your current rate, new rate, remaining balance, remaining term, and closing costs. A 1% rate reduction on a $300,000 balance with 25 years remaining can save roughly $200 per month and tens of thousands in lifetime interest. Enter your current loan details and proposed refinance terms to see estimated monthly savings, break-even months, and total interest saved. Savings shrink if you restart the clock with a new 30-year term.