Refinance calculator
Should you refinance? Compare your current loan to a new rate — see the monthly saving and exactly how many months it takes to break even on closing costs. No email, no lender attached.
New rate prefilled with today’s ~30-yr average (7.424%) from our live board — edit freely.
Should I refinance? The break-even test
A refinance replaces your current loan with a new one, ideally at a lower rate. The core question is break-even: how many months of savings it takes to earn back the closing costs. We compute your current principal-and-interest payment from your balance, rate and years left, do the same for the new loan, and divide closing costs by the monthly saving. Below break-even the refi has cost you money; past it, the savings are real.
Watch the total interest, not just the payment
Stretching back out to a fresh 30-year term almost always lowers the monthly payment — but paying for more years can raise total interest even at a lower rate. We show the interest remaining on your current loan next to the interest on the new one so you can weigh the monthly relief against the lifetime cost. Then check today’s real rates to see what you could get.
A worked example
You owe $320,000 with 27 years left at 7.25% — a principal-and-interest payment near $2,230/month. Refinance the same balance into a new 30-year loan at a rate three-quarters of a point lower and the payment drops to roughly $2,060, a $170/month saving. With $6,000 in closing costs, break-even is $6,000 ÷ $170 ≈ 35 months — just under three years. Keep the loan past then and the saving is real money. But note the term reset: you have added three years back onto the clock, so even at the lower rate the total interest can edge up. The calculator shows both numbers side by side so the monthly win and the lifetime cost are never confused.
What trips people up
- Chasing the payment alone. A lower monthly number can hide more interest over the life of the loan. Weigh the saving against how long you’ll actually keep the mortgage.
- Ignoring how long you’ll stay. If you’ll sell or refinance again before break-even, the closing costs never earn themselves back — the refi loses money.
- Forgetting the term reset. Refinancing a loan with 27 years left into a fresh 30 restarts amortization. To truly save, compare against keeping your current loan — or refinance into a shorter term.
Common questions
How does a refinance break-even work?
Break-even is closing costs divided by monthly savings. If refinancing saves $200/month and costs $6,000 to close, you break even in 30 months — after that the savings are yours. If you expect to move or refinance again before break-even, the refi may not pay off.
Does a lower payment always mean a better refinance?
Not necessarily. Resetting to a new 30-year term lowers the payment but can raise total interest over the life of the loan even at a lower rate, because you are paying for longer. Compare both the monthly saving and the interest over the years you will actually keep the loan.
Should I roll closing costs into the loan?
You can, which avoids cash out of pocket, but it raises the balance and slightly the payment, pushing out break-even. This calculator lets you enter closing costs directly so you can see the break-even either way.
By L.W. Martin, Founder — 20 years in the mortgage business, including 15 running his own brokerage. About → · Updated September 2026.