Mortgage Refinance Calculator

If you’re wondering whether refinancing is worth it, this mortgage refinance calculator can help. Just enter a few numbers from your current and potential new loan, and we’ll show you how much you could save… and how long it’ll take to break even. Instructions are beneath the calculator.

How to use this mortgage refinance calculator

If you’re trying to decide whether refinancing your mortgage is worth it, this calculator can walk you through the numbers. Just follow these steps to compare your current loan with a potential new one and see how much you could save… and how long it will take to break even.

1. Enter your current loan balance.
   This is the amount you still owe on your existing mortgage. You can usually find it on your most recent mortgage statement or through your loan servicer’s website.
2. Enter your current interest rate.
   Use the exact rate on your current mortgage, not the original loan’s APR. Enter it as a percentage (e.g., 2.9).
3. Enter the number of years left on your current loan.
   This is how much time you have remaining, not the original length of your mortgage. For example, if you’re 5 years into a 30-year loan, you’d enter 25.
4. Enter your proposed new interest rate.
   Use the current refinance rate you’ve been quoted or expect to get. This should be lower than your current rate for a refinance to make sense.
5. Select a new loan term.
   Choose how long your new loan would be, 30, 20, or 15 years are most common. A shorter loan usually saves more money overall but comes with higher monthly payments.
6. Enter your estimated closing costs.
   These are the fees you’ll pay to complete the refinance, including appraisal, title, lender, and recording fees. If you’re not sure, a rough estimate of $3,000–$6,000 is typical.
7. Decide whether to roll closing costs into the new loan.
   If you don’t want to pay closing costs out of pocket, check this box to roll them into your loan balance. Note: this increases your new loan size slightly and may affect your break-even point.
8. Optional: enter a cash-out amount.
   If you’re planning a cash-out refinance, enter how much cash you want to take out. This increases your loan balance and will be factored into the new loan payments.
9. Optional: enter your home’s current value.
   This is not required, but it helps determine your updated loan-to-value ratio. You can enter a recent appraisal value or a rough estimate based on similar homes in your area.
10. Click “Calculate.”
    We’ll show you your new monthly payment, how much lower it is than your current one, how long it will take to break even on closing costs, and your total savings over the life of the loan.

Use these results to decide if refinancing is worth it based on your personal timeline, savings, and future plans. If the break-even point is too far out, or the monthly savings aren’t meaningful, you may want to hold off.

What is mortgage refinancing?

Refinancing is when you replace your current mortgage with a new one, ideally with a lower interest rate, better terms, or both. People typically refinance to reduce their monthly payment, shorten the loan term, switch from an adjustable-rate to a fixed-rate mortgage, or tap into home equity with a cash-out refinance.

When you refinance, your new loan pays off your old loan in full. You then make payments on the new mortgage. While refinancing can save you money, it also comes with closing costs and sometimes resets the loan timeline. That’s why it’s important to run the numbers before making a decision.

When is refinancing worth it?

Refinancing is generally worth it if the savings outweigh the costs and the break-even point happens within a reasonable amount of time. For example, if refinancing lowers your monthly payment by $250 but costs $5,000 in closing costs, it would take 20 months to break even. After that, every month is pure savings.

You should consider refinancing if:

• Your current interest rate is significantly higher than what’s available now
• You plan to stay in your home long enough to reach the break-even point
• You want to switch loan types (such as from FHA to conventional)
• You need to consolidate debt or access equity through a cash-out refinance

Refinancing is not worth it if:

• Your new rate is only slightly better and the break-even point is too far off
• You plan to sell your home soon
• You can’t qualify for a good refinance rate due to low credit or high debt

Where does this calculator fit in?

This calculator is here to help you answer the biggest question: is refinancing worth it for me right now? It runs the math for you based on your loan balance, current rate, potential new rate, and the costs to refinance. You’ll see:

• How much lower your monthly payment could be
• How long it will take to break even on closing costs
• Your total savings over the life of the loan

Once you’ve run your numbers, you’ll have a clear view of whether a refinance makes financial sense. If it does, you can start comparing lenders. If not, you’ve saved yourself the hassle of applying only to find out it wouldn’t help much.

Tip: Watch out for teaser rates and fees

Some lenders advertise ultra-low rates to draw people in, but they often come with high closing costs or points that offset the benefit. Always look at the full picture; interest rate, loan term, total closing costs, and whether they’re being rolled into your loan. This calculator helps you do that all in one place.

The bottom line

Everyone’s situation is different. One thing is for certain, a refinance isn’t always the best idea. If you’re like me and already have a sub 3% interest rate, then you will likely enjoy that for life. Or unless you sell the home.

If you’re struggling with a high mortgage payment or unsure what your next move should be, it may help to speak with a local loan officer or financial advisor. You can also explore government-backed options for relief or lower-interest loans if you qualify.