Mortgage Refinance Calculator

What Is Mortgage Refinancing?

Refinancing means paying off your current mortgage with a new one — ideally at a lower rate, a shorter term, or both. The Federal Reserve's consumer guide notes that refinancing involves many of the same costs and procedures as your original mortgage, so the benefits need to outweigh those costs before it's worthwhile.

The Break-Even Formula

If you plan to stay in your home longer than the break-even point, refinancing typically makes financial sense. If you might move or refinance again sooner than that, the upfront costs may not be worth it.

How to Use This Calculator

Enter your current loan balance, current rate, and years remaining. Then enter the new rate and term you're considering, plus your estimated closing costs (ask your lender for an exact Loan Estimate — costs typically run 2–6% of the loan amount). The calculator shows your payment change and exact break-even point.

The Hidden Cost of Resetting the Clock

A lower monthly payment doesn't always mean a cheaper loan overall. If you're 10 years into a 30-year mortgage and refinance into a new 30-year loan, you're restarting the clock — even at a meaningfully lower rate, you could end up paying more total interest over the life of the loan. This calculator's "Lifetime Interest" comparison accounts for that.

Types of Refinancing

• Rate-and-term refinance: changes your rate, term, or both — what this calculator models
• Cash-out refinance: borrows more than your current balance and gives you the difference in cash
• No-closing-cost refinance: rolls closing costs into your rate or loan balance instead of paying upfront — per the CFPB, you still pay these costs one way or another

When Refinancing Makes Sense

Generally worth considering when your new rate is meaningfully lower than your current rate (often a 0.5–1+ percentage point difference), when you plan to stay in the home well past your break-even point, or when switching from an adjustable to a fixed rate to lock in payment certainty.

When It Might Not

If you're planning to move or sell within a few years, if the rate difference is small, or if closing costs are unusually high relative to your loan size, the math often doesn't favor refinancing — run the numbers above before committing.

Pairing With Your Broader Plan

If you're also carrying other debt, compare your refinance savings against paying down higher-interest balances first using our debt avalanche calculator. If you're considering tapping equity instead of a straight rate-and-term refinance, see our HELOC calculator for a revolving-credit alternative.

Frequently Asked Questions