Compare your current mortgage to a new loan and see monthly savings, break-even point, and the lifetime interest impact of refinancing.
Estimates for comparison only. Actual rates, closing costs, and terms depend on your lender, credit, and property. Figures assume a fixed rate and exclude taxes, insurance, and cash-out amounts.
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Refinancing can save thousands—or quietly cost you money when the term resets. This calculator compares your current mortgage to a new loan and shows your monthly savings, your break-even point, and—crucially—whether a lower rate still adds total interest once the term is extended. Make a data-driven refinance decision.
Refinancing replaces your current mortgage with a new one, usually to lower the interest rate, change the loan term, or switch loan types. The break-even point is when your accumulated monthly savings finally cover the closing costs. But watch the term: resetting a loan with 24 years left back to a fresh 30 years can raise your total interest even at a lower rate.
Break-Even Point
Rates dropped since you bought—see how much you could save each month and where you break even.
Compare a 15-year refinance: a higher payment but far less lifetime interest.
Extend the term for breathing room—and see the true long-term interest cost of doing so.
Reduce your monthly mortgage payment when rates fall.
Cut the total interest you pay over the life of the loan.
Move from a 30-year to a 15-year loan to build equity faster.
Lock in a stable fixed rate before an adjustable rate resets.
Eliminate private mortgage insurance once you reach 20% equity.
Divide your total closing costs by your monthly payment savings. If refinancing costs $6,000 and lowers your payment by $300 a month, you break even in 20 months ($6,000 ÷ $300). Refinancing pays off if you keep the loan past that point.
An old rule of thumb said to refinance only if you could cut your rate by at least 2%. Today most experts use a lower bar—often 0.5% to 1%—because closing costs and how long you plan to stay matter more than a fixed rate drop. Rely on the break-even point rather than a single rule.
Often yes. A 1% reduction on a $300,000 balance saves roughly $150 to $200 a month, so $6,000 in closing costs typically breaks even in about three years. It is worth it if you will keep the home longer than the break-even point and you are not resetting a nearly paid-off loan.
Refinance closing costs usually run 2% to 5% of the loan, so about $5,000 to $12,500 on a $250,000 mortgage. Costs include the appraisal, title, origination, and prepaid items. Some lenders offer no-closing-cost refinances in exchange for a higher rate.
Yes, unless you choose a shorter term. Refinancing 24 remaining years into a new 30-year loan restarts the clock—your payment drops, but you can pay more total interest despite the lower rate. This calculator flags that added interest so you can weigh cash flow against lifetime cost.
Shortening from 30 to 15 years raises the monthly payment but can save six figures in interest and builds equity much faster. If you can comfortably afford the higher payment, a shorter-term refinance is often the most cost-effective move.