Refinance CalculatorFree online financial calculator — instant results, no sign-up
Compare your current loan with a new rate and see your break-even point.
Estimates only, based on the inputs and assumptions shown. This is not financial, investment, tax, or legal advice. Prices, rates and local rules may change; crypto scenarios do not predict returns. Confirm important decisions with a qualified professional.
Sign in to save results and favorites.
About the Refinance Calculator
This calculator compares your existing mortgage to a potential refinance loan to determine your new monthly payment and cash savings. It estimates how many months it will take to recover upfront closing costs and calculates the net change in total payments over the life of the loan.
- Current balance
- The outstanding principal balance remaining on your existing mortgage, in dollars (e.g., $50,000 to $2,000,000).
- Current rate
- The annual interest rate on your current mortgage as a percentage (e.g., 2% to 12%).
- Years remaining
- The remaining repayment period on your current loan, in years (e.g., 1 to 30).
- New rate
- The annual interest rate offered for the replacement loan as a percentage (e.g., 2% to 12%).
- New term
- The full term length of the proposed refinance loan, in years (typically 15, 20, or 30).
- Closing costs
- The total upfront lender fees, appraisal fees, and closing expenses paid to secure the new loan, in dollars (e.g., $0 to $15,000).
Formula and method
PMT = P × [r(1 + r)^n] / [(1 + r)^n − 1] Monthly Savings = PMT_current − PMT_new Break-even Months = ceil(Closing Costs / Monthly Savings) Lifetime Change = (PMT_new × n_new) − (PMT_current × n_current)
- PCurrent principal balance ($)
- rMonthly interest rate (annual rate divided by 12 and 100)
- nTotal monthly payments (years × 12)
- PMT_currentMonthly principal and interest payment for the existing loan
- PMT_newMonthly principal and interest payment for the new loan
- Lifetime ChangeDifference in total payments between the new loan term and the remaining term
Monthly principal and interest payments are calculated for both loans using standard fixed-rate amortization. Monthly savings represent current payment minus new payment; if savings are positive, the break-even duration rounds up to the nearest whole month by dividing closing costs by monthly savings. Lifetime interest change evaluates total payments across the new loan term minus remaining total payments on the existing loan.
Worked example
These are the calculator's starting values and the results it actually produces for them.
Inputs
- Current balance250000 $
- Current rate7 %
- Years remaining27 years
- New rate6 %
- New term30 years
- Closing costs4000 $
Results
- Current payment$1,719.54
- New payment$1,498.88
- Monthly savings$220.66
- Break-even19 months
- Lifetime interest change-$17,534.62
How to use the Refinance Calculator
- 1Calculate the current monthly payment using your outstanding balance, current interest rate, and remaining months.
- 2Calculate the new monthly payment using the same balance, new interest rate, and new loan term in months.
- 3Subtract the new payment from the current payment to determine monthly savings.
- 4Divide closing costs by monthly savings (rounded up) to find break-even months, and subtract remaining current payments from total new payments to find lifetime cost change.
Reading your result
A positive monthly savings figure indicates immediate cash flow relief, while the break-even period tells you how long you must stay in the home before refinancing pays off. A negative lifetime change represents an overall reduction in total interest and loan payments, whereas a positive lifetime change indicates that extending the term adds net interest over time despite lower monthly payments.
Limitations
The calculation assumes closing costs are paid upfront out of pocket rather than rolled into the new loan balance. It only models principal and interest, omitting property taxes, homeowners insurance, private mortgage insurance (PMI), and the time value of money on invested savings.
Common questions
What happens if my monthly savings are zero or negative?+
If the new monthly payment is higher than or equal to your current payment, the break-even result displays 'Never' because closing costs cannot be recouped through monthly payment reductions.
Why is lifetime interest change negative when I lower my rate?+
In this calculator, a negative lifetime change means you spend less money in total over the life of the new loan compared to finishing your current loan, representing an overall financial gain.
Can refinancing for a lower rate still cost more overall?+
Yes. If you reset a partially paid-off loan back to a full 30-year term, the additional years of compounding interest can exceed the benefit of the lower interest rate, resulting in a higher total loan cost.
Does the calculator save my information?+
Calculations run in your browser. While signed in, inputs and results are automatically recorded in account history; saving a result creates a separate saved record.
Further reading
You might also like
Mortgage Calculator
Estimate your monthly house payment including taxes, insurance and HOA.
Amortization Calculator
See how each year of payments splits between interest and principal.
Mortgage Payoff Calculator
See how extra monthly payments shorten your loan and save interest.
House Affordability Calculator
Find a home price that fits your income and debts (28/36 rule).
Rent Calculator
How much rent you can afford based on income and debts.
Debt-to-Income Ratio Calculator
Measure your monthly debt payments against your gross income.
Results are estimates for informational purposes and are not financial, medical or legal advice.