Mortgage Refinance Calculator

Free Mortgage Refinance Calculator

Refinancing replaces your existing mortgage with a new loan at a different rate and term. Our free refinance calculator compares your current loan against the new terms so you can see your monthly savings, your break-even point, and the total lifetime savings after closing costs.

How to Use the Refinance Calculator

1. Current balance: Enter the remaining principal on your existing mortgage.
2. Current rate and term: Enter the rate you currently pay and the years remaining on the loan.
3. New rate and term: Enter the rate and term your lender is offering on the refinance.
4. Closing costs: Enter the estimated refinance closing costs to calculate the break-even point.

What Is the Refinance Break-Even Point?

The break-even point is how many months it takes for your monthly savings to equal the closing costs of the refinance. If you keep the new loan past break-even, every additional month saves you money. If you sell or refinance again before break-even, refinancing cost more than it saved you.

Worked Example: Refinancing $300,000 from 6.75% to 5.75%

Suppose you have a $300,000 balance on a 30-year loan at 6.75%, with 25 years remaining. You are considering refinancing into a new 25-year loan at 5.75% with $4,000 in closing costs:

The refinance saves you about $180/month. To recoup the $4,000 closing cost, you need to keep the new loan about 22 months ($4,000 ÷ $180). After break-even, you save $180 every month. Over the full 25 years, the refinance saves roughly $54,000 in total interest after accounting for closing costs.

Refinance vs. Mortgage Buydown

Refinancing replaces your existing loan with a new one. A mortgage buydown lowers the rate on a new purchase loan for the first few years. If you already own your home, a refinance is usually the right tool. If you are buying, consider a buydown to temporarily lower your payment.

Cash-Out Refinance vs. Rate-and-Term Refinance

This calculator focuses on a rate-and-term refinance, where you replace your existing loan with a new one at a better rate or term without changing the loan amount. A cash-out refinance lets you borrow more than your current balance and take the difference in cash, but it raises your loan amount and monthly payment. Use a rate-and-term refinance when your goal is to lower your payment or pay off the loan faster.

Refinance Glossary

Rate-and-term refinance

Replacing your current mortgage with a new one at a different rate or term, without changing the loan amount. The most common refinance type.

Cash-out refinance

A refinance where you borrow more than your current balance and receive the difference in cash. Raises your loan amount.

Break-even point

The number of months of monthly savings needed to equal the closing costs of the refinance. If you sell or move before break-even, refinancing costs more than it saves.

Closing costs

The fees paid to complete a refinance, typically 2-6% of the loan amount. Includes lender fees, appraisal, title insurance, and recording fees.

No-closing-cost refinance

A refinance where the lender covers the closing costs in exchange for a slightly higher interest rate. Useful if you plan to move or refinance again soon.