Refinancing replaces your current mortgage with a new one, ideally at a lower rate or better terms. The key question is whether the monthly savings justify the closing costs, which typically run 2-5% of the loan amount. On a $300K refinance, that is $6K-$15K. If refinancing saves you $200/month, break-even is 30-75 months. This calculator determines your break-even point, monthly savings, and total interest saved to help you decide whether refinancing makes sense for your specific situation and timeline.
Mortgage Refinance Calculator
See how much you could save by refinancing your mortgage.
Mortgage Refinance Calculator Comparison
Monthly payments at various rates
| Rate | Monthly Payment | Total Interest | Total Paid |
|---|---|---|---|
| 5% | $1,503 | $261,116 | $541,116 |
| 5.5% | $1,590 | $292,331 | $572,331 |
| 6% | $1,679 | $324,347 | $604,347 |
| 6.5% | $1,770 | $357,125 | $637,125 |
| 7% | $1,863 | $390,625 | $670,625 |
| 7.5% | $1,958 | $424,808 | $704,808 |
How to Use This Calculator
- Enter your current loan balance, interest rate, and remaining term
- Set the new interest rate and term you are considering
- Add estimated closing costs — ask your lender for a Loan Estimate
- View your new monthly payment, monthly savings, and break-even month
- Compare total interest paid under current vs new loan to see lifetime savings
How It Works
This calculator uses the standard amortization formula to compute your mortgage refinance calculator payment.
The basic rule:
- Monthly Payment = P × [r(1+r)^n] / [(1+r)^n – 1]
- r = annual interest rate ÷ 12
- n = loan term × 12 (total monthly payments)
- Total Interest = (Monthly Payment × n) – Principal
Results are estimates. Actual payments may vary based on fees, insurance, and other factors.
Tips & Considerations
- The rule of thumb is to refinance when you can reduce your rate by at least 0.75-1% and plan to stay in the home past the break-even point.
- Cash-out refinancing lets you tap equity but resets your amortization clock. You might lower your rate but extend your payoff by years.
- No-closing-cost refinances exist but the costs are rolled into a higher interest rate. You pay less upfront but more over the life of the loan.
- Refinancing resets your amortization schedule. If you are 10 years into a 30-year mortgage, refinancing to a new 30-year term means 40 total years of payments unless you choose a shorter term.
Frequently Asked Questions
When does refinancing make sense?
Refinancing typically makes sense when you can lower your rate by at least 0.5-1%, plan to stay in the home long enough to recoup closing costs (usually 2-5 years), or need to switch from an adjustable to fixed rate.
What does refinancing cost?
Closing costs are typically 2-5% of the loan amount. On a 300K loan, expect 6K-15K in fees. Calculate your break-even point by dividing closing costs by monthly savings.
Can I refinance with bad credit?
FHA streamline refinances have minimal credit requirements if you have an existing FHA loan. For conventional refinancing, most lenders want a credit score of 620+, though better rates start at 740+.