Compare your current mortgage to a new rate and term. See how much you save each month, your total interest savings, and how many months it takes to break even on closing costs.
Each payment uses the standard amortizing loan formula: M = P × [r(1+r)n] / [(1+r)n − 1], where P is the loan balance, r is the monthly rate (annual rate ÷ 12), and n is the number of monthly payments. We compare your current payment (on the balance over the years remaining) against a new loan at the new rate and term. Break-even is your closing costs divided by the monthly savings — the number of months before the refinance pays for itself. After that point, the monthly savings are money in your pocket.
It is how long it takes for your monthly savings to cover the closing costs. If you save $200 a month and pay $5,000 in closing costs, you break even in about 25 months. If you plan to keep the home past that point, the refinance generally makes sense.
Not always. Extending the term resets the clock, so a much longer new term can raise your total lifetime interest even at a lower rate. This calculator shows both the monthly savings and the lifetime interest change so you can see the full picture.
Closing costs typically include the loan origination fee, appraisal, title insurance, and recording fees, often 2 to 5 percent of the loan amount. Some lenders offer a no-closing-cost refinance that rolls the fees into a slightly higher rate.
A common rule of thumb is at least a 0.5 to 1 percentage point drop, but the real test is the break-even point versus how long you will keep the loan. Use the calculator with your actual numbers rather than a rule of thumb.
The amortization math is exact for fixed-rate loans, but your real quote depends on lender fees, points, escrow, and credit. Treat this as a planning estimate, not a guaranteed offer.
Disclaimer: This tool provides an estimate for general informational purposes only and is not financial advice. Rates, closing costs, and loan terms vary by lender and location. Consult a licensed mortgage professional before refinancing.