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Refinance Calculator

Whether refinancing your mortgage pays off: the new payment, the monthly saving, how long the closing costs take to earn back, and the change in total cost.

Refinancing $300,000 from 7.75% to 7.28% cuts the payment by $160 a month. The $6,000 of closing costs pays back in 3 years 2 months, but costs $28,167 more over the loan, because the new term restarts the clock.

New monthly payment
$2,052.64
You save a month
$159.65
Break-even
3 years 2 months
Lifetime cost change
+$28,167

This week's mortgage rates →

Refinancing $300,000 with 27 years left at 7.75%, with $6,000 of costs, into a new 30-year loan

New rateMonthly savingBreak-even
7%$2162 years 4 months
6.5%$3161 year 7 months
6%$4141 year 3 months
5.5%$5091 year

How this calculator works

The monthly saving is your current principal and interest minus the new one. The break-even point is closing costs divided by that saving: how many months until the refinance has paid for itself.

The lifetime comparison adds the interest left on your current loan against the new loan's interest plus closing costs. A new 30-year term can lower the payment yet cost more overall, because it restarts the clock.

What it assumes

  • Costs paid in cash, not rolled into the loan; no cash out.
  • Stay past the break-even point for the refinance to pay.

Questions people ask

When is it worth refinancing?

When you'll keep the home longer than the break-even period. A common rule of thumb looks for a rate at least half to three-quarters of a point lower, but break-even time is what matters.

How much does it cost to refinance?

Usually 2% to 5% of the loan in closing costs: lender fees, appraisal, title and recording. Points to buy the rate down add more.

Does refinancing restart my loan?

Yes, a new loan starts a new schedule. Choosing a shorter term, or paying the old payment on the new loan, avoids stretching the payoff date.

Does refinancing hurt my credit?

The application adds a hard inquiry and a new account, a small, short dip. Shopping several lenders within a few weeks counts as one inquiry for scoring.

Related calculators

  • Mortgage CalculatorYour full monthly mortgage payment: principal and interest, property tax, insurance, PMI and HOA dues, at this week's average rate, with a yearly amortization schedule.
  • Mortgage Payoff CalculatorHow much sooner your mortgage is paid off, and how much interest you save, by paying extra each month or making a one-time payment.
  • HELOC CalculatorHow big a home equity line of credit you could get, and what it costs a month: interest-only while you draw, then principal and interest once repayment starts.

Sources

Updated by the RateHerald team. The maths is tested against worked examples; report a problem.

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