How the Refinance Calculator works
Estimate mortgage refinance savings and break-even time. Adjust the inputs above, then use the calculate button to generate a fresh estimate based on the numbers you entered.
The result is designed to give you a quick planning number, plus a short breakdown of the major figures behind it. You can reset the form at any time and try a different scenario.
When to use this calculator
Use this refinance calculator when you are comparing your current mortgage with a new rate or loan offer. It helps estimate the monthly payment change and the break-even point for refinance costs.
Formula
Break-even months = refinance costs / monthly savings
- Current balance is the mortgage amount being refinanced.
- Current rate and new rate estimate the payment difference.
- Remaining term sets the repayment timeline.
- Refinance costs are compared against monthly savings.
Worked example
If your balance is $380,000, your current rate is 5.75%, the new rate is 4.85%, and refinance costs are $3,500, the calculator estimates monthly savings and how many months it may take to recover the costs.
Common mistakes
- Ignoring penalties, legal fees, appraisal fees or discharge fees.
- Refinancing for a lower payment while extending the term and increasing total interest.
- Assuming savings matter if you plan to sell before the break-even date.
FAQs
What is a break-even point?
It is the estimated number of months needed for monthly savings to recover refinance costs.
Should I refinance if the payment is lower?
Not always. Compare total costs, penalties and how long you plan to keep the mortgage.
Does this include prepayment penalties?
Only if you include them in refinance costs. Add all expected costs for a better estimate.