Refinance Calculator

Should You Refinance Your Mortgage?

Refinancing replaces your current mortgage with a new loan — ideally at a lower interest rate, shorter term, or both. This calculator helps you compare your current loan to a potential new one and see whether the numbers make sense.

Key Metrics to Evaluate

Monthly Savings — the difference between your current and new monthly payment. This is the most immediate benefit you’d feel.

Break-Even Point — how many months until your accumulated monthly savings offset your closing costs. If you plan to stay in the home longer than the break-even period, refinancing likely makes financial sense.

Lifetime Interest Savings — total interest on your current remaining loan minus total interest on the new loan, minus closing costs. This is your net gain over the entire loan life.

When Does Refinancing Make Sense?

A common rule of thumb: refinancing is worth it if you can lower your rate by at least 0.5% to 1% and you plan to stay in the home past the break-even point.

Strong cases for refinancing:

• Your rate is 1%+ above current market rates
• Your break-even point is under 2 years
• You want to switch from a 30-year to a 15-year to save on total interest
• You need to lower monthly payments and plan to stay long-term

Be cautious if:

• You’re planning to sell in the next 2–3 years
• Your break-even is 5+ years out
• You’d be extending your term significantly (e.g., restarting a 30-year after 10 years paid)

What Are Typical Closing Costs?

Refinance closing costs typically run 2% to 5% of the loan amount. On a $280,000 balance, that’s $5,600 to $14,000. Common fees include:

• Origination fee (0.5–1% of loan)
• Appraisal ($300–$600)
• Title insurance and search
• Government recording fees
• Prepaid interest and escrow setup

Some lenders offer “no-closing-cost” refinances by rolling costs into a slightly higher rate — use this calculator to compare both scenarios.