Mortgage Refinance Calculator
Use this mortgage refinance calculator to compare your current mortgage with a potential refinance using your current loan balance, remaining term, current monthly principal and interest payment, 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 total amount paid over time.
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 loan balance, 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, choose whether they are paid upfront or rolled into the new loan, and add your expected stay horizon.
- Review the updated comparison to see how the monthly payment, estimated remaining payments, break-even timing, and payoff timeline change.
- Use the horizon review and amortization-schedule handoff to see whether the refinance tradeoff fits how long you expect to keep the loan or home.
This works well for evaluating refinance tradeoffs before you move on to a lender quote or formal refinance application.
If you already know your current and new monthly principal-and-interest payments and only want the break-even timing, use the Refinance Break-Even Calculator.
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 estimates three things: the new monthly payment using a standard fixed-rate formula, how long monthly savings take to recover closing costs (break-even), and the estimated total paid under each scenario.
New monthly payment formula
New payment = B × r × (1 + r)n / ((1 + r)n − 1)
Main inputs in the payment formula
- B
- Refinance balance — your current loan balance, or balance plus closing costs if they are rolled into the new loan
- r
- Monthly rate derived from the new interest rate (annual rate ÷ 12 ÷ 100)
- n
- Total number of monthly payments in the new loan term
How break-even and totals are estimated
- Break-even months = closing costs ÷ monthly savings. This shows how many months of lower payments it takes to recover what you spent to refinance.
- Estimated refinance total = new monthly payment × new term in months + closing costs paid upfront. This is compared against estimated remaining payments on the current loan.
- Estimated remaining payments on the current loan = current monthly payment × remaining months.
- 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.
- Estimated remaining payments are based on the current monthly principal and interest payment multiplied across the remaining term.
- Estimated new payments are based on the refinance balance, new refinance rate, new term, and how you choose to handle closing costs.
- Break-even timing estimates how long monthly payment savings may take to offset closing costs, whether they are paid upfront or rolled into the new loan.
- 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 - 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 remaining payments on the current loan are about $637,551.36, compared with an estimated $500,493.05 in new payments plus closing costs for the refinance option.
At those payment savings, the refinance break-even point is about 42 months, or about 3.5 years.
This example shows why a refinance decision is not only about lowering the payment. Refinance rate, new loan term, closing costs, and total remaining payments 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 the total amount paid over the modeled horizon 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 amount paid 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 the total amount paid.
What does refinance break-even mean?
Break-even is the point where the modeled payment difference has caught up with 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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