Refinance Calculator
Current Loan
New Loan
New Payment
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Monthly Savings
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Break-Even
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Lifetime Savings
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Should You Refinance?
Refinancing replaces your current loan with a new one — ideally at a lower interest rate, shorter term, or both. The decision comes down to two numbers: your monthly savings and your break-even point. If you'll stay in the home longer than it takes to break even on the closing costs, refinancing usually makes financial sense.
How Break-Even is Calculated
Tips
- Shop at least 3 lenders. Rates and closing costs vary significantly — a difference of 0.25% on a $300,000 loan is about $15,000 over 30 years.
- Consider a 15-year refi if you can handle the higher payment. You'll pay it off faster and save a substantial amount in interest.
- Refinancing into a longer term while lowering your rate may reduce monthly payments but increase total interest paid over the life of the loan.
- If rates drop again, you can refinance again — there's no rule that limits how many times you can refinance.
Frequently Asked Questions
What is a break-even point?
The break-even point is the number of months it takes for your cumulative monthly savings to exceed the closing costs of the refinance. If you plan to stay in the home longer than the break-even period, refinancing is likely worth it. If you may move or sell before that, it may not be.
What are typical refinance closing costs?
Closing costs typically run 2–5% of the loan balance — roughly $4,000–$10,000 on a $200,000 mortgage. Some lenders offer no-closing-cost refinances where costs are rolled into the loan or offset by a slightly higher rate. These are worth comparing if you plan to sell within a few years.
How much rate reduction justifies refinancing?
A common rule of thumb is that a 1% rate reduction is worth refinancing. But this depends on your remaining loan balance and how long you plan to stay. A 0.5% reduction on a large balance with a short break-even can absolutely be worth it. Use this calculator to get the actual numbers for your situation.
Should I restart the clock on my loan term?
Refinancing into a new 30-year loan when you have 20 years left resets your amortization — your early payments go mostly to interest again, and you may pay more in total interest even at a lower rate. A 15-year or 20-year refi or a shorter term can capture savings without extending your payoff date significantly.