# Mortgage Refinance Calculator Calculate if refinancing your mortgage saves money. Compare current and new rates, monthly savings, and break-even point. ## What this calculates Determine whether refinancing your mortgage makes financial sense. Compare your current loan with a new rate and term to see monthly savings, the break-even point, and total lifetime savings after closing costs. ## Inputs - **Current Loan Balance** ($) — min 0 — Remaining balance on your current mortgage. - **Current Interest Rate** (%) — min 0, max 15 — Your current mortgage interest rate. - **Years Remaining on Current Loan** — min 1, max 30 — How many years left on your current mortgage. - **New Interest Rate** (%) — min 0, max 15 — The interest rate offered for refinancing. - **New Loan Term** — options: 10 years, 15 years, 20 years, 25 years, 30 years — The term of the new refinanced loan. - **Closing Costs** ($) — min 0 — Total refinancing closing costs (typically 2-5% of loan). ## Outputs - **Current Monthly Payment** — formatted as currency — Your current monthly mortgage payment. - **New Monthly Payment** — formatted as currency — Monthly payment after refinancing. - **Monthly Savings** — formatted as currency — How much less you pay each month. - **Break-Even Point** — formatted as text — Months to recoup closing costs through savings. - **Net Lifetime Savings** — formatted as currency — Total savings over the life of the new loan minus closing costs. ## Details Mortgage refinancing replaces your current home loan with a new one, ideally at a lower interest rate or better terms. The decision to refinance depends on how much you can save versus the upfront closing costs. The break-even point is the key metric: it tells you how many months of savings are needed to recover the closing costs. If you plan to stay in the home longer than the break-even period, refinancing makes financial sense. Closing costs typically range from 2-5% of the loan amount ($5,000-$12,500 on a $250,000 loan). A general rule of thumb is that refinancing is worth considering when the new rate is at least 0.5-1% lower than your current rate. However, the actual savings depend on your loan balance, remaining term, and closing costs. Extending your loan term (e.g., refinancing a 25-year remaining loan into a new 30-year loan) lowers payments but may increase total interest over the life of the loan. ## Frequently Asked Questions **Q: When should I refinance my mortgage?** A: Consider refinancing when you can lower your rate by at least 0.5-1%, your credit score has improved significantly, you want to switch from an adjustable to a fixed rate, or you want to change your loan term. Also consider how long you plan to stay in the home: you need to stay past the break-even point to benefit. Refinancing may not make sense if you plan to move within 2-3 years, as you may not recoup the closing costs. **Q: What is the break-even point for refinancing?** A: The break-even point is when your cumulative monthly savings equal the closing costs. Calculate it by dividing closing costs by monthly savings. If closing costs are $5,000 and you save $200/month, break-even is 25 months. If you stay in the home longer than 25 months after refinancing, you come out ahead. A break-even point of 3 years or less is generally considered favorable. **Q: What are typical refinance closing costs?** A: Refinance closing costs typically range from 2-5% of the loan amount and include application fee ($300-500), appraisal ($300-600), title search and insurance ($700-900), origination fees (0.5-1% of loan), recording fees, and various administrative charges. Some lenders offer no-closing-cost refinancing, but these typically have a slightly higher interest rate to compensate. Always compare the total cost of options. **Q: Should I refinance to a shorter term?** A: Refinancing to a shorter term (e.g., 30-year to 15-year) increases your monthly payment but saves substantially on total interest. It also builds equity faster. This makes sense if you can comfortably afford the higher payment. However, if the higher payment would strain your budget, refinancing to a lower rate on the same or longer term and voluntarily making extra payments gives you flexibility without the obligation. **Q: Does refinancing extend my mortgage payoff date?** A: It depends on the new term. If you have 25 years left and refinance to a new 30-year loan, yes, you extend your payoff by 5 years and may pay more total interest despite the lower rate. To avoid this, refinance to a shorter term that matches or reduces your remaining payoff timeline. Many people refinance to a 30-year term for the lower payment flexibility but make extra payments to match their original payoff schedule. --- Source: https://vastcalc.com/calculators/finance/refinance Category: Finance Last updated: 2026-04-21