Refinance Calculator
Decide whether refinancing is worth it. Enter your current balance, rate and months left, then the new rate, term and closing costs. You will see the new monthly payment, how much you save each month, how many months it takes to break even on the fees, and your total savings.
How to use the refinance calculator
- Enter your current loan balance, interest rate and the number of months left.
- Enter the new rate, the new loan term in months and the closing costs to refinance.
- Compare the monthly savings, the break-even point and the lifetime savings to decide.
Examples
250k balance, drop from 7% to 5.5%
Balance 250,000, current rate 7% with 300 months left, new rate 5.5% over 360 months, closing costs 4,000
Payment falls from about 1,766.95 to 1,419.47, saving about 347.48 a month and breaking even in roughly 12 months
New rate is higher than the old one
Balance 200,000, current rate 4% with 240 months left, new rate 6% over 240 months, closing costs 4,000
Monthly savings are zero or negative, so there is no break-even point and refinancing is not worth it
Frequently asked questions
What is the break-even point on a refinance?
It is the number of months of lower payments needed to recover the closing costs. We divide the closing costs by your monthly savings. If you plan to keep the loan past that point, refinancing tends to pay off; if you sell or pay it off sooner, it may not.
What counts as closing costs?
Closing costs are the up-front fees to refinance, such as lender or origination fees, an appraisal, title and escrow charges, and recording fees. They typically run a few thousand dollars. Enter the total you expect to pay so the break-even is accurate.
When does refinancing actually make sense?
It usually makes sense when the new rate is meaningfully lower, you will keep the loan past the break-even point, and the lifetime savings are positive. A lower payment alone is not enough if closing costs are high or you move soon.
Does refinancing reset the term of my loan?
It can. Refinancing into a fresh 30-year term lowers the monthly payment but stretches the loan back out, which can raise the total interest you pay even at a lower rate. Watch the lifetime savings figure, not just the monthly number, and consider a shorter new term.
How is the monthly payment calculated?
We use the standard amortization formula on your current balance: the balance times the monthly rate, divided by one minus (one plus the monthly rate) raised to the negative number of months. The monthly rate is the annual rate divided by 12.
Are these results financial advice?
No. They are estimates for principal and interest only and ignore taxes, insurance and the time value of money. Confirm the exact rate, fees and terms with your lender before you refinance.
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