Mortgage Refinance Calculator
Find out whether refinancing your mortgage would pay off. Compare your current loan with a new one to see how much you'd save each month, how long it takes to earn back the closing costs and where you'd stand after the years you plan to keep the loan.
Results are estimates. The calculator compares principal and interest only, assumes fixed rates with interest applied monthly, and assumes you make only the required payments. It leaves out property taxes, insurance, PMI, escrow and what you could earn by investing the monthly savings. See our terms of use.
How to use this refinance calculator
Take three numbers from your latest mortgage statement: the balance you still owe, your interest rate and the years left on the loan. Then enter the new loan's rate, term and closing costs from a lender's Loan Estimate, the standard form a lender must give you within three business days of your application.
Under More options you can roll the closing costs into the new loan, take cash out and set how long you expect to keep the loan. That last number matters most, because a refinance only pays off if you keep the loan past its break-even point. The results show:
- Monthly savings: how much lower your principal-and-interest payment would be.
- Break-even point: the month when the refinance has paid for itself. If your payment doesn't go down, there's no break-even point.
- Net savings: how far ahead or behind you'd be after the years you keep the loan, once closing costs and the difference in what you still owe are counted.
In the example already loaded, refinancing $300,000 from 7.25% with 27 years left into a 30-year loan at 6.25% cuts the payment from $2,112.58 to $1,847.15, a saving of $265.43 a month. With $6,000 in closing costs, you break even after 25 months and come out $20,478 ahead after 10 years.
How the break-even point is calculated
The quick way to estimate a break-even point is to divide your closing costs by your monthly savings:
Break-even (months) = closing costs ÷ monthly savings
In our example, $6,000 ÷ $265.43 = 22.6, or about 23 months. That's a handy rule of thumb, but it's a little optimistic. A new 30-year loan pays down your balance more slowly than your current loan, so part of the lower payment is simply paying off less debt. The calculator counts that too:
Net savings = payment savings + (current loan balance − new loan balance) − closing costs paid upfront
After 24 months, you'd have saved $6,370 in payments, but you'd owe $468 more on the new loan than on the old one, so you'd still be $98 behind. You pull ahead in month 25. After 10 years, you'd have saved $31,852 in payments and owe $5,374 more. Subtract the $6,000 in costs and you're $20,478 ahead.
The same math handles closing costs you add to the loan: they raise the new balance instead of coming out of your pocket. In the example, rolling them in makes the new payment $1,884.09 and moves the break-even point to 28 months. Any cash you take out counts as money you receive, so the net figures show only what it costs to borrow it.
What closing costs to expect
A refinance comes with many of the same fees you paid when you bought: lender origination and underwriting fees, an appraisal, a credit report, title services and government recording charges. Freddie Mac estimates refinance closing costs at about 3% to 6% of the loan amount, depending on your lender, your credit and where you live. Our example uses $6,000, or 2%, which is below that range. Here's how higher costs change the result for the same loan:
| Closing costs | Quick estimate | Calculator's break-even | Net savings after 10 years |
|---|---|---|---|
| $6,000 (2%) | 23 months | 25 months | $20,478 |
| $9,000 (3%) | 34 months | 37 months | $17,478 |
| $12,000 (4%) | 46 months | 50 months | $14,478 |
| $18,000 (6%) | 68 months | 77 months | $8,478 |
Get Loan Estimates from several lenders and compare them line by line.
When refinancing makes sense
- A lower rate you'll keep long enough. What matters is how fast the savings repay the costs and whether you'll stay past that point. A smaller drop in our example, from 7.25% to 6.875%, saves $141.80 a month but doesn't break even until month 79. Sell after 3 years and you'd be $2,878 behind.
- Dropping mortgage insurance. A new conventional loan for 80% or less of your home's current value usually doesn't need PMI. On many FHA loans the mortgage insurance premium lasts for the life of the loan, so refinancing into a conventional loan may be the only way out. This calculator compares principal and interest only, so add the premium you'd drop to your monthly savings. See how to get rid of PMI.
- Moving from an adjustable rate to a fixed rate. If your ARM is about to adjust, a fixed rate locks in your payment. See fixed vs. adjustable-rate mortgages.
- Switching to a shorter term. In our example, a 15-year loan at 6.25% raises the payment by $459.69, so there's no break-even point. But it costs $215,468 less in interest and closing costs over the life of the loan and makes you debt-free 12 years sooner. Shorter terms often come with lower rates, too. Compare the 15-year vs. 30-year mortgage.
Watch out for "resetting the clock"
A new 30-year loan starts a new 30-year schedule, and early payments on any loan are mostly interest (see how amortization works). Part of the lower payment comes from stretching your debt over more years. In our example the new loan adds 3 years but still costs $13,502 less in total, because the rate drop is large.
The longer you've had your loan, the bigger this effect. With 20 years left on the same $300,000 at 7.25%, a new 30-year loan at 6.25% cuts the payment by $523.98 a month, but it costs $101,904 more in interest and closing costs if you keep it to the end. A 20-year loan at the same rate saves $178.34 a month and costs $232,269 in interest and closing costs to payoff, versus $269,071 for the current loan. It breaks even after 25 months, sooner than the quick estimate of 34, because it pays down debt faster. Or take the longer loan and keep paying your old amount. Our mortgage payoff calculator shows what that saves.
The risks of a cash-out refinance
A cash-out refinance replaces your mortgage with a bigger one and pays you the difference. In our example, taking out $50,000 adds $307.86 a month to the new payment. Instead of falling by $265.43, your payment rises by $42.43, and the new loan costs $47,327 more in interest and closing costs over its life.
- Your home secures the debt. Using it to pay off credit cards or a car loan turns short-term debt into a 30-year mortgage, and if you fall behind, you could lose your home.
- You keep less equity, which leaves a smaller cushion if home prices fall or you need to sell.
- There are limits. FHA cash-out refinances are capped at 80% of the home's value, and conventional programs set their own limits.
Are no-closing-cost refinances worth it?
A "no-closing-cost" refinance still has costs. You just pay them another way. As the CFPB explains, the lender either adds them to your loan amount or charges a higher interest rate and gives you a credit to cover them. You can test the first option with the "Add closing costs to the new loan" box.
A higher rate costs more the longer you keep the loan. For example, say a lender offers 6.5% with no closing costs instead of 6.25% with $6,000 in costs. The no-cost loan saves $216.38 a month and comes out ahead at first, but paying the costs upfront pulls ahead in month 96, after 8 years. Run each offer through the calculator and compare the net savings for the years you expect to stay.
How soon can you refinance?
It depends on the loan type and whether you take cash out:
- Conventional cash-out: Fannie Mae generally requires your current mortgage to be at least 12 months old, and at least one borrower must have been on the title for 6 months.
- FHA streamline: you must have made at least six payments on your FHA loan, at least six months must have passed since the first payment was due, and at least 210 days must have passed since closing.
- VA streamline (IRRRL): federal law requires at least six consecutive monthly payments and 210 days since the first payment due date. The lender must also show that the lower payments will repay the fees within 36 months.
- Other refinances: rules vary by lender and program, so ask before you apply. Also check whether your current loan has a prepayment penalty.
Frequently asked questions
How much lower does my rate need to be?
There's no single rule. A small drop can pay off when costs are low and you stay for years, and a big drop may not if you move soon. For a VA streamline refinance from one fixed rate to another, federal law does require the new rate to be at least 0.5 percentage point lower.
Does refinancing hurt my credit?
Applying leads to a credit check, but the CFPB says checks by mortgage lenders within a 45-day window are recorded as a single inquiry, so shopping around doesn't add to the impact.
Can I cancel a refinance after closing?
Usually, if it's the home you live in. You have until midnight of the third business day after closing, or after you receive the required disclosures and cancellation notice if that's later. Saturdays count as business days, but Sundays and federal holidays don't. You must cancel in writing. With your current lender, it covers only extra money you borrow, such as cash out.
Are refinance points tax-deductible?
According to the IRS, points you pay to refinance generally must be deducted over the life of the loan, not all in the year you pay them. Ask a tax professional how this applies to you.
Last reviewed: October 2026