Mortgage Refinance Calculator
Compare the loan you still owe with a new rate and term, and see how many months of savings it takes to cover closing costs.
Key concepts
Break-even
The number of months of payment savings needed to recover closing costs. After that month, the lower payment has covered the upfront cost in this model.
Net benefit
Interest you would still pay on the current loan, minus interest on the new loan, minus closing costs. A longer new term can erase a lower rate.
What this tool does
Current loan versus new loan
Enter the balance you still owe, the rate, and the years left. Scenario A is one refinance offer: new rate, new term, and closing costs. Say how long you will stay and the page compares that stay with the break-even month. The current payment is rebuilt with the standard formula — it will not match a statement that includes escrow. The PMMS 30-year chip fills the new rate from Freddie Mac’s survey, shows the survey date, and leaves that field editable. It does not replace the rate on the loan you already have. A HELOC is not cash-out, and the refinance calculator does not model cash-out.
A second offer
Scenario B is another quote against the same current loan, such as a 15-year refinance beside a 30-year one. The balance chart shows the current loan and Scenario A. Read Scenario B in the metric cards.
Break-even formula
Monthly savings = current payment − new payment Break-even months = closing costs ÷ monthly savings Net benefit = remaining interest − new interest − closing costs
Both loans use fixed-rate amortization on the same balance. Break-even is shown only when the new payment is lower. If you shorten the term, the payment can rise even while total interest falls — there is no monthly-savings break-even in that case, and the net benefit line is the one to read. Cash-out, points as a rate buy-down schedule, and tax deductions are not modeled.
Worked example
The page opens on $250,000 left at 7% with 25 years to go, and a new loan at 6% for 30 years with $6,000 in closing costs. Monthly savings are $268 and break-even is 23 months, inside the 300 payments still left. Stretching the term back to 30 years can increase total interest even after the rate cut. Compare that with Scenario B at 15 years: the payment may be higher, break-even may disappear, and total interest can still fall.
Common mistakes
- Refinancing only because the rate is lower, then restarting a 30-year clock and paying more interest overall.
- Treating break-even as a reason to refinance if you will move or sell before that month.
- Comparing an escrow-inclusive statement payment with this principal-and-interest figure.
Methodology on this page
Two fixed-rate schedules on the current balance. Break-even months use ceiling division of closing costs by monthly principal-and-interest savings. The page also states whether that month falls inside the payments left on the current loan. Savings after that loan would already be paid off are not counted toward recovery. Net benefit subtracts new interest and closing costs from the interest still due on the current loan. Not financial advice, and not a Loan Estimate.
Read the full FinTools4U methodology →Frequently asked questions
What is break-even?
How many months of lower principal-and-interest payments it takes to recover the closing costs you entered. It is blank when the new payment is not lower.
Why can a lower rate cost more overall?
A longer term means more months of interest. Net benefit captures that. A negative number means the new loan costs more over its full term after closing costs.
Does this include cash-out or points?
No. The new loan amount equals the current balance. Put lender fees you would pay upfront into closing costs. Points are not converted into a separate rate schedule.
Is this financial advice?
No. It is an educational comparison that stays in your browser. A lender’s Loan Estimate is the document that includes your actual fees. PMMS 30-year fills the new rate from the Freddie Mac survey and shows the survey date. It does not replace the rate on the loan you already have. You can still edit the field. The link stores the number you apply. Indicative rate, not a recommendation.
Sources & further reading
- CFPB — Owning a Home — Borrower-facing context for refinance decisions and closing costs.
- CFPB — Interest rate versus APR — Closing costs can show up in APR even when this tool lists them separately.
Related guide
When a mortgage refinance breaks even
How closing costs, a new rate, and a new term decide whether refinancing the balance you still owe actually saves money.
How rent versus buy is calculated
Net cost of owning and renting over a horizon you choose, what the optional rates change, and when the FinTools4U comparison is not enough.
Related calculators
Mortgage Payment
Price a new purchase payment before you look at a refinance.
Amortization Schedule
Inspect the month-by-month split on either loan.
Extra Payments
Sometimes paying extra beats refinancing.
Home Affordability
Check the payment a new purchase can carry before you compare a refinance.
Rent vs Buy
A refinance is a loan you already owe. Rent versus buy is the decision before you buy.