Mortgage Refinance Calculator
Use this mortgage refinance calculator to compare your current mortgage with a potential refinance based on your current balance, payment, rate, remaining term, new refinance rate, new term, and closing costs.
It is built as a refinance comparison tool, not just a break-even calculator. The goal is to help you see how a refinance may change your monthly payment, how closing costs affect the tradeoff, and whether a new term improves or worsens the longer-term cost of the loan.
Results are planning estimates only. Refinance offers, closing costs, escrow changes, taxes, insurance, and lender-specific underwriting can vary.
How to use this calculator
- Enter your current mortgage balance, current rate, remaining term, and current monthly principal and interest payment.
- Add the new refinance rate and term you want to compare.
- Enter estimated refinance closing costs.
- Calculate to compare current payment, new payment, total remaining loan cost, break-even timing, and interest tradeoffs.
- Review whether the refinance is helping mainly because of a lower rate, a shorter term, a longer term, or some combination of all three.
This works well for evaluating refinance tradeoffs before you move on to a lender quote or formal refinance application.
How it works
This calculator compares your current mortgage with a potential refinance using the current balance, existing payment, new rate, new term, and closing costs you enter.
It is designed to surface refinance tradeoffs such as monthly payment change, total remaining loan cost, closing-cost recovery, and whether a longer or shorter term is driving the result.
Refinance comparison math
Monthly savings = Current payment − New refinance payment
Main inputs in the estimate
- Current payment
- Your current monthly principal and interest payment
- New payment
- The estimated refinance payment based on current balance, new rate, and new term
- Closing costs
- Estimated refinance costs used to evaluate break-even timing and total refinance cost
What the estimate assumes
- The refinance payment is estimated from the current loan balance, new rate, and new term.
- Current remaining loan cost is estimated from the current monthly principal and interest payment multiplied by the remaining term.
- Refinance loan cost includes estimated refinance closing costs.
- This is a planning comparison only and not a lender-specific refinance offer.
Assumptions and limitations
- This calculator compares principal and interest payments only, plus refinance closing costs.
- Current remaining loan cost is estimated from the current monthly principal and interest payment multiplied by the remaining term.
- Refinance loan cost is estimated from the current balance, new refinance rate, new term, and closing costs.
- Break-even timing is based on payment savings only and does not capture every refinance consideration.
- Real refinance decisions can differ based on taxes, insurance, escrow setup, appraisal, lender fees, and underwriting.
Example scenario
Use this example to see how a refinance comparison can surface both monthly payment change and long-term tradeoffs.
- Current balance:
$285,000 - Current rate:
7.25% - Remaining term:
24 years - Current monthly principal and interest payment:
$2,213.72 - New refinance rate:
6.10% - New refinance term:
20 years - Closing costs:
$6,500
With those assumptions, the estimated new monthly payment is about $2,058.30, which is about $155.42 lower than the current payment.
The estimated current remaining loan cost is about $637,551.36, compared with an estimated $500,493.05 for the refinance option including closing costs.
At those payment savings, the refinance break-even point is about 41.82 months, or roughly 3.49 years.
This example shows why a refinance decision is not only about lowering the payment. Rate, term, closing costs, and total remaining loan cost all matter.
Frequently asked questions
How does a mortgage refinance calculator work?
It compares your current mortgage with a new refinance scenario using your remaining balance, current payment, new rate, new term, and closing costs. It then estimates how the payment and total remaining loan cost may change.
Does refinancing always lower total interest?
No. A refinance can lower the monthly payment but still increase total long-term cost if the loan term resets or closing costs are high. That is why payment change and total cost should be reviewed together.
What happens if the payment drops because the term resets?
A longer new term can lower the monthly payment by stretching repayment over more time. That may help cash flow, but it can also reduce or erase long-term interest savings.
Should closing costs be included?
Yes. Closing costs are a key part of the refinance decision because they affect both break-even timing and total refinance cost.
What does refinance break-even mean?
Break-even is the point where monthly payment savings have recovered the estimated closing costs. It is useful, but it should not be the only factor in a refinance decision.
How is this different from a mortgage calculator?
A mortgage calculator estimates the payment for one mortgage scenario. A refinance calculator compares the mortgage you have now with a possible replacement loan.
Is this a lender offer or approval?
No. This is a planning estimate only. Real refinance offers depend on credit, appraisal, lender fees, escrows, taxes, insurance, and underwriting.
Does this calculator include taxes and insurance?
No. This comparison focuses on principal and interest plus closing costs so the refinance tradeoff stays clear. Escrowed taxes and insurance can still matter in a real refinance.
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