Real Estate
Mortgage Refinance Calculator
Compare fixed-rate payments on the same remaining balance and selected term at current and proposed interest rates, calculate monthly savings, and divide entered closing costs by those savings for a simple break-even estimate.
Current comparable payment-
New monthly payment-
Estimated monthly savings-
Closing-cost break-even-
Exact scenario comparison
Proposed mortgage rate (%) scenarios
Exact scenario comparisonProposed mortgage rate (%) changes while all other entered assumptions remain constant.
| Proposed mortgage rate (%) | Current comparable payment | New monthly payment | Estimated monthly savings | Closing-cost break-even |
|---|
Period-by-period detail
Monthly schedule and annual summary
How to use Mortgage Refinance Calculator
- Enter the remaining principal, current rate, proposed rate, new term, and all borrower-paid refinance costs.
- Review current-comparable and proposed payments, monthly savings, and the simple month when accumulated savings recover closing costs.
- Compare total interest, payoff date, cash versus financed costs, and the expected time the new loan will remain outstanding.
Calculator guide
Understanding Mortgage Refinance Calculator
A refinance can lower the monthly payment while still increasing lifetime interest when the repayment clock is extended. This page holds balance and term constant between the current-rate and proposed-rate calculations so the simple payment savings and closing-cost recovery period can be seen without that term-reset effect being hidden.
Calculation method
How the calculation works
Calculate old and proposed fixed-rate payments on the same balance and term, then divide closing costs by monthly savings for a simple break-even estimate. Calculate old and proposed fixed-rate payments on the same balance and term, then divide closing costs by monthly savings for a simple break-even estimate.
Worked situations
Practical examples
- Enter the unpaid principal balance rather than the home's market value or original loan amount.
- Use the same remaining term for both rates when the goal is to isolate rate savings.
- If the proposed loan restarts a longer term, run a separate total-interest comparison using the actual current remaining term and proposed term.
Better inputs
Useful tips
- Request a complete loan estimate showing points, lender fees, third-party costs, escrow changes, and lender credits.
- Compare the break-even month with the expected date of sale, payoff, or another refinance.
- Check whether closing costs are paid in cash or added to the new balance, because financing them changes principal and interest.
Before relying on the result
Limitations and common mistakes
- The current comparable payment is recalculated from the entered balance, current rate, and the new selected term; it may not equal the contractual current payment.
- Total interest, financed fees, cash-out proceeds, taxes, escrow, mortgage insurance, prepayment penalties, and term-reset effects are not included in the simple break-even result.
- Rates, qualification, appraisal, title requirements, and lender approval are not predicted.
Reference
Key terms
- Remaining balance
- Unpaid mortgage principal used as the common amount for both payment calculations.
- Monthly savings
- Comparable payment at current rate minus payment at proposed rate.
- Closing costs
- Entered upfront refinance expenses used in the simple recovery calculation.
- Break-even month
- Closing costs divided by monthly payment savings.
Important note
Calculated from the entered property and financing assumptions. It does not replace lender, appraisal, legal, tax, or investment review.
Frequently asked questions
Why does the displayed current payment differ from the statement?
The page recalculates it using the entered comparison term; the actual loan may have a different remaining term, escrow, insurance, or payment history.
What if monthly savings are zero or negative?
There is no positive simple break-even from payment savings under those assumptions.
Should lender credits reduce closing costs?
Use the net cost actually borne for the chosen rate, while recognizing that a lender credit may be funded through a higher rate.
Is breaking even enough to prove refinancing is beneficial?
No. Compare total interest, term, financed costs, cash requirements, taxes, flexibility, and expected holding period.