Free Refinance Calculator
Calculate if refinancing your mortgage saves money. Compare monthly payments, total interest, and find your break-even point.
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Current Mortgage
New Mortgage
Results
Current Monthly Payment
$1766.95
New Monthly Payment
$1419.47
Monthly Savings
+$347.48
Total Savings
+$15,074
Break-Even Point
12 months
Formula
M = P × [r(1+r)^n] / [(1+r)^n – 1]. Break-Even = Closing Costs ÷ Monthly Savings.How the Refinance Calculator Works
This calculator compares your current mortgage payment to a potential new one, accounting for closing costs. It calculates your monthly savings, total savings over the life of the loan, and the break-even point — the number of months until your savings cover the cost of refinancing.
When to Refinance Your Mortgage
Refinancing replaces your current mortgage with a new one, ideally at better terms. Consider refinancing when:
- Rates have dropped — even a 0.5% reduction on a $250,000 loan can save $80+/month
- Your credit score improved — better credit qualifies you for lower rates
- You want to change your term — switch from 30 to 15 years to pay off faster, or extend to lower monthly payments
- You want to drop PMI — if your home value increased and you now have 20%+ equity
- You need cash — a cash-out refinance lets you borrow against your equity
Types of Refinancing
- Rate-and-term refinance — changes your interest rate and/or loan term. The most common type. No cash out.
- Cash-out refinance — borrow more than you owe and pocket the difference. Useful for home improvements or debt consolidation, but increases your loan balance.
- Streamline refinance — simplified process for FHA or VA loans with less paperwork and no appraisal required.
The Break-Even Rule
The most important number in any refinance decision is the break-even point. If you plan to sell or move before reaching break-even, refinancing costs you money. If you'll stay past break-even, you save. A shorter break-even period (under 2-3 years) makes refinancing a strong decision.
Enter your current and proposed loan details above to see exactly how much you could save and whether refinancing is worth it for your situation.
Frequently Asked Questions
When does refinancing make sense?
Refinancing typically makes sense when you can lower your rate by at least 0.5-1%, you plan to stay in the home past the break-even point, and you can afford the closing costs. Use this calculator to find your break-even point — if you'll be in the home longer than that, refinancing saves money.
What are typical refinance closing costs?
Closing costs for a refinance are typically 2-5% of the loan amount ($3,000-$6,000 on a $250,000 loan). This includes appraisal fees ($300-600), title insurance ($500-1,500), origination fees (0.5-1.5% of loan), and other lender fees.
What is the break-even point?
The break-even point is when your monthly savings from refinancing equal the closing costs you paid. For example, if closing costs are $4,000 and you save $200/month, your break-even is 20 months. After that point, you're saving money every month.
Should I refinance to a shorter term?
Refinancing from a 30-year to a 15-year mortgage means higher monthly payments but dramatically less total interest. If you can afford the higher payments, a shorter term builds equity faster and saves tens of thousands in interest.
Can I refinance with bad credit?
You can refinance with a credit score as low as 580 (FHA streamline) or 620 (conventional), but you'll get higher rates. FHA streamline refinances don't require a new appraisal or credit check if you're current on payments. VA IRRRL offers similar benefits for veterans.