Refinance Calculator: Free & Easy Tool (2026)

Quick answer

Refinancing makes sense when your monthly savings repay closing costs (usually 2% to 5% of the loan) before you move. For example, refinancing a $300,000 balance from 7.5% to 6.25% saves about $291 a month; with $6,000 in costs it breaks even in about 21 months. Watch out for restarting a long term, which can raise total interest.

Is it worth refinancing your mortgage? Our free refinance calculator shows your new payment, monthly savings, break-even month and how total interest changes, so you can decide with real numbers.

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Mortgage Refinance Calculator

Compare your current loan with a new one and see your monthly savings and break-even point.

Current loan balance ($)

Current interest rate (%)

Years left on current loan

New interest rate (%)

New loan term

Refinance closing costs ($)

Monthly savings

–

New payment (P&I)–

Break-even–

Lifetime interest change–

When does refinancing make sense?

You can lower your rate enough that monthly savings repay closing costs well before you plan to move.
You want to remove mortgage insurance, for example moving from FHA to conventional once you have 20% equity.
You want a shorter term to pay the home off sooner.
You want to switch from an adjustable rate to a fixed rate.
You need cash for major repairs through a cash-out refinance (use with care).

The break-even point

Refinancing costs money, usually around 2% to 5% of the loan. Divide your closing costs by your monthly savings to find the break-even point. In the calculator example, a $300,000 balance at 7.5% with 28 years left, refinanced to 6.25% for 30 years, saves about $291 a month. With $6,000 in costs, it breaks even in about 21 months. If you plan to stay longer than that, the refinance likely pays off.

Refinance calculator – Person holding paper near a calculator — Divide closing costs by monthly savings to find your break-even month.

Watch out for restarting the clock

If you are 5 years into a 30-year loan and refinance into a new 30-year loan, you extend your payoff by 5 years. Your payment may drop, but total interest can still rise. To avoid this, choose a shorter term (like 20 or 15 years) or keep making your old payment amount on the new loan. See 15 vs 30-year mortgages.

House model and stacks of coins — Lower rates can save hundreds a month

Large brick house with a lawn — Lower rates can save hundreds a month

A refinance is worth it when you will stay in the home longer than the break-even point, and you are not just stretching out your debt.

Types of refinance

Type	What it does	Best for
Rate-and-term	Changes the rate and/or term	Lower payment or faster payoff
Cash-out	Borrows more than you owe and gives you the difference	Large repairs or consolidating high-interest debt
Streamline (FHA, VA)	Simplified refinance with less paperwork	Existing FHA or VA borrowers
FHA to conventional	Moves to a loan without lifetime MIP	Owners with 20%+ equity and good credit

General overview; eligibility varies by lender and program.

How to refinance

Check your credit score and home equity.
Get Loan Estimates from at least three lenders.
Compare rates, fees and the break-even point.
Lock your rate when you are ready.
Provide documents and schedule an appraisal if required.
Review the Closing Disclosure and close.

Person writing on a document — Compare Loan Estimates from several lenders before you lock.

Refinance checklist

Monthly savings large enough?
Break-even before you move?
Not restarting a long term?
Compare 3+ lenders.
Check for prepayment penalties.

Refinance calculator examples: how much a lower rate saves

These examples use the same starting point as the calculator above: a $300,000 balance at 7.5% with 28 years left, a current principal and interest payment of about $2,139, and closing costs of $6,000 (2% of the loan). Each row shows a new 30-year loan at a different rate. Figures are rounded and cover principal and interest only.

New rate (30 years)	New payment	Monthly savings	Break-even
7.00%	about $1,996	about $143	about 42 months
6.75%	about $1,946	about $193	about 31 months
6.50%	about $1,896	about $242	about 25 months
6.25%	about $1,847	about $291	about 21 months
6.00%	about $1,799	about $340	about 18 months
5.75%	about $1,751	about $388	about 16 months

Refinance savings and break-even by new rate ($300,000 balance, $6,000 costs)

The pattern is clear: a half-point drop takes more than three years to pay back, while a drop of a point or more pays back in about two years or less. If you might sell or move within three years, a small rate drop is rarely worth it.

Shorter term vs lower payment: the total interest trade-off

A refinance calculator shows the monthly payment, but the bigger number is total interest. Using the same $300,000 balance and a 6.25% rate, here is how the term changes the picture (rounded, principal and interest only):

Option	Monthly payment	Total interest over the loan
Keep current loan (7.5%, 28 years left)	about $2,139	about $418,600 remaining
Refinance to 30 years at 6.25%	about $1,847	about $365,000
Refinance to 20 years at 6.25%	about $2,193	about $226,300
Refinance to 15 years at 6.25%	about $2,572	about $163,000

Total interest by refinance term ($300,000 at 6.25%)

The 20-year option costs only about $54 a month more than the current payment but cuts remaining interest by close to $192,000 and ends the loan 8 years sooner. That is often a better deal than the lowest possible payment. Compare the terms in our 15 vs 30-year mortgage guide.

The “keep paying the old amount” strategy

If you refinance to 30 years at 6.25% but keep paying your old $2,139 each month, the extra principal pays the loan off in about 21 years, with total interest of roughly $240,000. You keep the flexibility of the lower required payment if money gets tight, while still saving a lot of interest.

How to use this refinance calculator step by step

Find your current balance and rate on your latest mortgage statement, not your original loan papers.
Enter the years left on your current loan. If you are 5 years into a 30-year loan, enter 25.
Enter a real quoted rate from a Loan Estimate, not an advertised rate, which may assume points or perfect credit.
Pick the new term and try more than one: 30, 20 and 15 years.
Enter total closing costs from the Loan Estimate, including lender fees, appraisal, title and any points.
Read three numbers: monthly savings, break-even month and lifetime interest change. A good refinance usually looks good on all three.

What is in refinance closing costs

Closing costs usually run about 2% to 5% of the loan. Knowing the pieces helps you compare offers and spot fees you can shop for:

Lender fees: origination, underwriting and processing.
Discount points: optional upfront interest paid to lower the rate. Run the break-even math separately for points.
Appraisal: often required, though some streamline refinances skip it.
Title search and lender’s title insurance.
Recording fees and government charges.
Prepaid items: interest, property taxes and insurance for your new escrow account. These are not true fees, but they affect your cash to close.

A “no-closing-cost” refinance rolls the costs into a higher rate or a larger balance. That can make sense if you expect to move soon, but enter the higher rate in the calculator to compare honestly. See our closing cost calculator for estimates.

Common refinancing mistakes

Comparing only monthly payments. A longer term can lower the payment and still raise total interest.
Getting one quote. Rates and fees vary between lenders; get at least three Loan Estimates on the same day.
Ignoring how long you will stay. If you move before the break-even month, the refinance loses money.
Using cash-out for spending. Turning home equity into a vacation or car stretches short-term costs over decades.
Opening new credit before closing. A new card or car loan can change your rate or approval.

Run several scenarios in the refinance calculator above before you talk to lenders. Knowing your break-even month and interest trade-off puts you in control of the conversation.

Helpful resources: For more on refinance calculator, see the Consumer Financial Protection Bureau and U.S. Department of Housing and Urban Development.

Refinance calculator: frequently asked questions

When is it worth it to refinance a mortgage?

When the monthly savings repay your closing costs before you plan to move, and the new loan does not add too many years or too much total interest. Lowering your rate by about 0.75 to 1 point or more often makes sense, but run the break-even math.

How much does it cost to refinance?

Usually about 2% to 5% of the loan amount, including lender fees, appraisal, title and recording costs.

How do I calculate the break-even point?

Divide total refinance closing costs by your monthly savings. For example, $6,000 in costs and $300 a month in savings breaks even in 20 months.

Does refinancing restart my loan?

Yes, a refinance is a new loan. Choosing the same long term again can increase total interest even if your payment drops.

Is it worth refinancing to save $200 a month?

Often, yes, if you will stay long enough. With $6,000 in closing costs, saving $200 a month breaks even in 30 months. If you plan to stay well past that and do not add many years to the loan, the refinance usually pays off.

How much lower should my rate be to refinance?

There is no single rule, but in our $300,000 example, a half-point drop took about 42 months to break even, while a full point took about 25 months. Use the calculator with your real costs and how long you plan to stay.

Sources: Consumer Financial Protection Bureau, Freddie Mac, HUD. Prices are national planning ranges, not quotes. See how we research costs.