Refinance Calculator
Calculate your new monthly payment, total interest savings, and break-even period when refinancing a loan, from current and new loan terms plus closing costs.
Current Loan
$
%
yrs
New Loan
%
yrs
$
Monthly Payment Savings
$278.08
New Monthly Payment
$1,842.26
Current Monthly Payment
$2,120.34
Total Interest Savings
$83,422.53
Break-Even Period
14.4 months
How the Refinance Calculator Works
Enter your current loan balance, rate, and remaining term alongside the new rate, new term, and estimated closing costs for the refinance. The calculator computes the monthly payment on both loans, the monthly and lifetime interest savings from switching, and the break-even period — how many months of savings it takes to recoup the closing costs — so you can judge whether refinancing is worth it given how long you plan to keep the loan.
Break-Even (months) = Closing Costs / Monthly Savings
Example
A $300,000 balance at 7% with 25 years remaining currently costs about $2,121/month. Refinancing into a 5.5% rate over 25 years drops the payment to about $1,842/month — a savings of roughly $279/month. With $4,000 in closing costs, the break-even point is about 14 months: after that, every month you keep the loan is pure savings.
Common Use Cases
- Deciding whether a lower refinance rate is worth the closing costs.
- Comparing how a shorter or longer new term changes monthly payment and total interest.
- Estimating how many months you need to stay in the home to break even.
- Weighing lifetime interest savings against near-term cash flow needs.
FAQs
What if the new payment is higher than the old one?
If monthly savings are zero or negative, there's no break-even point to recoup closing costs from lower payments — refinancing would only make sense for other reasons, like switching from an adjustable to a fixed rate, or cashing out equity.
Should I judge a refinance only by monthly savings?
No — also compare total interest paid over the full loan life. Extending the term can lower your monthly payment while actually increasing total interest paid, even at a lower rate, so check both figures before deciding.
How long should I plan to stay in the loan to make refinancing worth it?
A common rule of thumb is to only refinance if you plan to keep the loan well beyond the break-even period shown here. If you might sell or pay off the loan sooner than that, the closing costs may not be fully recovered.