Refinance Calculator
Current vs. Refinance Terms
Refinance Summary
| Current Monthly Payment | — |
|---|---|
| New Monthly Payment | — |
| Monthly Savings | — |
| Break-Even Period | — |
| Total Remaining Current Interest | — |
| Total Refinance Interest | — |
| Net Lifetime Savings | — |
Visual Breakdown (New Loan)
Enter values and press Calculate to see the new loan breakdown pie chart and balance path line chart.
How to Use This Refinance Calculator
A lower rate email from your lender is tempting, but refinancing is not free—you reset the clock, pay closing costs, and might stretch total interest even while the monthly check shrinks. Run your current loan against the new offer here to see monthly savings, break-even months, and net lifetime interest before you sign disclosures.
- Enter remaining loan balance. Use the payoff amount from your servicer, not the original loan size.
- Fill in current loan terms. Current rate and remaining years left on your existing mortgage.
- Fill in new refinance terms. New rate, new term, and total refinancing fees paid upfront.
- Press Calculate. Review current vs new payment, monthly savings, break-even period, total interest comparison, net lifetime savings, charts, and amortization on the new loan.
For true borrowing cost including fees on a single offer, try the APR Calculator. To accelerate payoff instead of refinancing, use the Mortgage Payoff Calculator.
Refinance Formulas and Practical Applications
Refinancing trades one payment stream for another—like swapping phone plans. The lower bill only wins if you stay long enough to earn back the switch fee and if total interest over your actual hold period actually drops.
Monthly payment comparison
Both current and new loans use standard fixed-rate amortization on the remaining balance (new loan) or full balance at the quoted terms:
M = P × [ i(1 + i)ⁿ ] / [ (1 + i)ⁿ − 1 ]
Monthly Savings = Current Payment − New Payment
Break-even period
Break-Even Months = Refinancing Costs / Monthly Savings
If closing costs are $5,000 and you save $250/month, break-even is 20 months. Plan to stay in the home and keep the loan at least that long—or the refinance may cost more than it saves.
Net lifetime savings
Net Savings = (Current Pmt × Remaining Mos) − (New Pmt × New Mos + Fees)
Watch the term reset trap: dropping from 7% to 5.5% on a new 30-year loan when you only had 22 years left can lower the payment but increase total interest. Net lifetime savings catches that—positive means the refinance wins over the full modeled horizon.
Frequently Asked Questions
When does refinancing make financial sense?
Refinancing often makes sense when monthly savings recover closing costs before you sell or pay off the loan, and when total lifetime interest falls even if the term resets longer.
What is the refinance break-even period?
Break-even months equal refinancing fees divided by monthly payment savings. If you move before break-even, you may not recoup closing costs.
Does extending the loan term affect refinance savings?
Yes. A lower rate on a fresh 30-year term can cut monthly payments but increase total interest if you had fewer years remaining on the old loan. Compare net lifetime savings, not just the monthly drop.
Are refinance closing costs included?
Yes. Enter total refinancing fees and costs in dollars. The break-even and net lifetime savings calculations treat them as upfront cash paid at closing.
How is this different from the APR Calculator?
The APR Calculator solves for true borrowing cost on a single loan with fees. This Refinance Calculator compares two loan scenarios side by side for payment savings, break-even, and lifetime interest difference.