Find out how much you could save by refinancing — monthly payment reduction, break-even point, and total lifetime interest saved.
Enter your current loan balance, interest rate, and remaining term in the "Current Mortgage" section. Then fill in your proposed new interest rate, new loan term, expected closing costs, and how many years you plan to stay in the home. Click Calculate Refinance Savings to instantly see your monthly savings, break-even point, and total interest comparison.
Use the sliders for quick adjustments — the calculator updates as you click Calculate, letting you easily compare scenarios side by side.
Refinancing can be one of the smartest financial moves you make — or a costly mistake if the timing is wrong. The difference between a 6.5% and a 5.25% interest rate on a $300,000 mortgage is roughly $240 per month. Over 7 years, that's nearly $20,000 back in your pocket.
But the monthly savings don't tell the whole story. Closing costs of $5,000–$8,000 are common, meaning you need to stay in the home long enough to recoup those upfront costs. If you break even at month 30 but plan to move in year 3, refinancing barely pays off.
Homeowners who refinanced in 2020–2021 when rates dropped below 3% saved an average of $2,800 per year. With rates rising since then, the calculus has shifted — but if your current rate is above market, refinancing still makes sense. This calculator helps you run the numbers before calling your lender.
The monthly mortgage payment uses the standard amortization formula:
The break-even point is calculated by dividing your total closing costs by your monthly savings: Break-Even Months = Closing Costs ÷ Monthly Payment Reduction.
The total interest comparison sums all interest payments over each loan's remaining life. Net savings over your stay period accounts for closing costs, actual payments made, and remaining balances if you sell before the loan ends.
The primary benchmark is the break-even point — how many months it takes for cumulative monthly savings to exceed your closing costs. If you plan to stay in the home longer than the break-even period, refinancing is generally worth it. Factor in whether you're extending your loan term, which can offset savings.
Closing costs for a refinance typically range from 2%–5% of the loan amount. On a $250,000 loan, that's $5,000–$12,500. Common fees include origination fees, appraisal ($400–$700), title insurance, and prepaid interest. Some lenders offer to roll costs into the loan or rate.
A mortgage application triggers a hard credit inquiry, which may temporarily lower your score by 5–10 points. However, credit bureaus treat multiple mortgage inquiries within a 14–45 day window as a single inquiry, so shopping multiple lenders within that timeframe won't compound the damage.
A shorter term (e.g., 15 years) means higher monthly payments but dramatically less interest paid over the life of the loan. A longer term lowers monthly payments and improves cash flow but increases total interest. The right choice depends on your financial goals, cash flow needs, and how long you plan to stay.