Refinance calculator

What a new mortgage saves each month, how long it takes to earn back the closing costs, and what it costs over its whole life.

When refinancing pays off

A refinance replaces your mortgage with a new one, usually at a lower rate. It costs money up front: lender fees, appraisal, title insurance and any points, typically 2% to 5% of the loan. The break-even point is how long the monthly savings take to repay those costs. If you expect to sell or refinance again before then, the new loan loses money.

Break-even here is closing costs divided by monthly savings, the measure lenders quote. If you add the costs to the loan instead, there is nothing to earn back up front, but you pay interest on them for the life of the loan, which shows in the totals.

The catch with a new 30-year loan

Restarting the clock lowers the payment partly by stretching what you owe over more years. With 20 years left, a new 30-year loan adds ten more years of interest, so it can cost more in total even at a lower rate. The calculator compares everything left to pay on each path, so you can see this directly. A shorter new term, or paying the old payment into the new loan, avoids it.

How this calculator works

Both loans are amortized month by month with interest rounded to the cent, exactly as in the amortization calculator. "Total to pay" is every remaining payment on the current loan, against every payment on the new loan plus closing costs paid in cash. See the methodology page for the formulas.

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