Refinance Calculator
Compare your existing loan against a new refinance offer to see your monthly savings and exactly how many months it takes to recoup the closing costs.
*Estimates only. Not financial advice. Actual refinance offers vary by lender and credit profile.
🔁 Should You Refinance?
The math behind deciding if a lower rate is actually worth the upfront cost.
How it Works
Calculates your current monthly payment and your projected new monthly payment, then divides your one-time closing costs by the monthly savings to find the break-even month.
The Formula
Break-Even Months = Closing Costs ÷ (Current Payment − New Payment). Both payments use the standard amortized loan payment formula.
Pro Tip
Compare lifetime interest, not just the monthly payment. Resetting to a fresh 30-year term can lower your payment while costing more in total interest over time — check both numbers before deciding.
Frequently Asked Questions
What is a refinance break-even point? +
The break-even point is the number of months it takes for your monthly savings from a lower rate to offset the closing costs you paid to refinance. If your break-even is 18 months, you need to keep the new loan for at least 18 months to come out ahead.
How much does it typically cost to refinance? +
Closing costs on a mortgage refinance usually run 2% to 5% of the new loan amount, covering appraisal, origination fees, title insurance, and recording fees. On a $300,000 refinance, that's typically $6,000 to $15,000.
Is it worth refinancing for a small rate reduction? +
It depends on how long you'll stay in the loan and the closing costs. A common rule of thumb says refinancing makes sense if you can cut your rate by at least 0.5-1 percentage point and plan to stay past the break-even month, but every situation is different — run the numbers.
Does resetting the loan term affect total interest paid? +
Yes. Refinancing into a new 30-year term after already paying down several years of your original loan restarts the amortization clock, which can lower your monthly payment but increase total interest paid over the life of the loan even at a lower rate.
Can I roll closing costs into the new loan? +
Many lenders allow a "no-closing-cost" refinance where fees are rolled into the loan balance or offset with a slightly higher rate. This avoids upfront cash but increases your loan balance or rate, so compare the true break-even against paying costs out of pocket.
What credit score do I need to refinance? +
Most lenders want a minimum credit score of 620 for a conventional refinance, though the best rates typically go to borrowers above 740. Government-backed refinance programs (FHA, VA) may allow lower scores.