Find out if refinancing your mortgage saves money. Calculate your break-even point, monthly savings, and lifetime interest reduction.
Enter your current loan balance, your existing interest rate, and the new rate you've been offered. Select the new loan term — refinancing into a shorter term like 15 years can dramatically reduce total interest even if the rate is similar. Add your estimated closing costs (typically 2–5% of the loan balance) and any cash-out amount if applicable.
The calculator instantly shows your new monthly payment, how much you save each month, your break-even point in months, and your total lifetime interest savings. Use these numbers to decide whether refinancing is worth pursuing.
Refinancing typically makes sense when you can reduce your rate by at least 0.5 to 1 percentage point, you plan to stay in the home long enough to pass the break-even point, and you have sufficient equity (at least 20% to avoid PMI). The lower your new rate and the longer you plan to stay, the more valuable a refinance becomes.
Rate-and-term refinancing purely lowers your rate or changes your term. Cash-out refinancing lets you borrow against your equity — useful for home improvements, debt consolidation, or large purchases, but it increases your loan balance and resets your payoff timeline.
The break-even formula is straightforward: Break-Even Months = Total Closing Costs ÷ Monthly Savings. If you pay $4,500 in closing costs and save $150/month, your break-even is 30 months (2.5 years). Every month after that, the refinance is pure savings. This is the single most important number for evaluating whether to refinance.
Be aware that extending your term can create a lower monthly payment that looks attractive, but you may pay more total interest over the life of the loan — which is why this calculator also shows lifetime interest savings alongside monthly savings.