Mortgage Refinance Calculator
Compare your current mortgage to a refinance, including closing costs and the break-even point.
How the mortgage refinance calculator works
Refinancing swaps your current mortgage for a new one — usually for a lower rate, a shorter term, or both. The calculator sets your existing payment beside the proposed one and adds the closing costs of making the switch.
Because those costs take time to recoup, the headline number is the break-even month: when your monthly savings finally repay them. It also compares total interest on both loans, so a lower payment that simply re-stretches the balance won't mislead you.
Worked example: with current balance of $250,000, current rate of 7.25% and years left on current loan of 27, the mortgage refinance calculator shows monthly payment savings of $261.61.
- Current payment
- $1,760.48
- New payment
- $1,498.88
- Break-even
- 17 mo
- Lifetime interest change
- -$30,802
The formula
New monthly payment uses the standard amortization formula on the refinanced balance, rate, and term. Break-even months equal total closing costs divided by the monthly payment reduction. Lifetime interest is summed separately for each loan and subtracted to show the net difference.
- Both loans are assumed fixed-rate; an adjustable starting rate would understate later payments once it resets.
- Closing costs are paid upfront in cash, not rolled into the new balance, which would change the break-even.
- Break-even ignores the time value of money and any return you could earn on the cash spent on fees.
- Property taxes and homeowners insurance are excluded, since escrow amounts are unchanged by refinancing.
- The comparison assumes you keep the new loan to term rather than selling or refinancing again early.
Reference data
Current figures behind this tool: FHA Mortgage Insurance (MIP) Rates 2026.
Results are estimates for educational purposes and are not financial advice. Confirm exact figures with your lender or a licensed advisor.
Questions about the mortgage refinance calculator
Does refinancing restart my mortgage clock back to 30 years?
It can, and that is the hidden cost. A new 30-year loan resets the term, so even at a lower rate you may pay more total interest by stretching the balance over more years.
To avoid that, refinance into a term matching the years you have left, or make extra principal payments to offset the reset.
How much does a rate drop need to be before refinancing is worth it?
There is no universal threshold; it depends on your balance and fees. A larger loan earns back closing costs faster, so even a half-point cut can pay off, while a small balance may need a full point or more.
Run the break-even: if you will keep the home well past that month, the refinance makes sense.
Can I refinance if my home value has dropped since I bought it?
Possibly, but a lower appraisal raises your loan-to-value ratio, which can trigger mortgage insurance or disqualify you above roughly 80 percent. Some borrowers bring cash to closing to shrink the balance, and certain streamline programs waive a fresh appraisal entirely. The calculator assumes you already qualify at the rate you enter.
Is the Mortgage Refinance Calculator free to use?
Yes. Every calculator on MortgageLoansCalculator is completely free, with no sign-up, login or paywall. Run as many scenarios as you like.
How does refinancing a mortgage work?
Refinancing replaces your current mortgage with a new one — ideally at a lower rate or shorter term. It carries closing costs, so it pays off once your monthly savings recover those costs; that recovery point is the break-even shown above.
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