Refinance Calculator
Compare your current loan with a refinance — monthly savings and break-even point.
How to use
- Enter your current balance, rate, and remaining term.
- Enter the new rate, new term, and closing costs.
- Click Calculate to see monthly savings and your break-even point.
Estimates only — not financial advice. Principal & interest only; taxes and insurance not included. Verify important decisions with a qualified professional.
What Is a Refinance Calculator?
A refinance calculator compares your current loan with a proposed replacement loan, showing the monthly savings, the total interest difference, and — most importantly — the break-even point: how long you must keep the new loan before its savings repay the closing costs it took to get it. Refinancing replaces your existing loan with a new one, usually at a lower rate or a different term, and it nearly always costs money upfront. Whether it is a smart move depends entirely on whether you keep the new loan long enough to come out ahead.
The break-even point turns a sales pitch into a decision. If refinancing saves $180 a month but costs $3,600 in closing costs, you need 20 months in the home just to get your money back; if you might move in a year, the refinance loses money even though the payment drops. This calculator also surfaces a subtler trap: restarting the clock on a fresh long term can lower the payment while increasing total interest, so the total-interest comparison matters as much as the monthly one.
How to Use the Refinance Calculator
- Enter your current loan balance, its interest rate, and the term you have remaining (in years).
- Enter the new loan's interest rate and its full term in years.
- Enter the closing costs of the refinance in dollars — request an itemized estimate from the lender.
- Click Calculate to see the new monthly payment, your monthly saving, your break-even point in months, and the total interest of both loans.
When Refinancing Usually Makes Sense
The classic case is a meaningful rate drop on a loan you plan to keep for years — the monthly savings accumulate well past the break-even point. Refinancing can also make sense to switch from an adjustable rate to the certainty of a fixed rate, to remove mortgage insurance after building equity, or to shorten the term and retire the debt sooner. It makes the least sense near the end of a loan (little interest remains to save), when closing costs are high relative to the balance, or when a move or payoff is likely before break-even.
Tips Before You Refinance
- Compare the Loan Estimates of at least two or three lenders; closing costs vary by thousands of dollars for identical rates.
- Watch out for "no-cost" refinances — the costs are usually folded into a higher rate or the balance, not waived.
- Be careful extending the term: dropping from 22 remaining years into a fresh 30-year term can raise total interest even at a lower rate.
What is the break-even point on a refinance?
It is the closing costs divided by the monthly savings — the number of months until the savings have repaid what the refinance cost. If you will keep the loan beyond that point, the refinance saves money; if not, it loses money, however attractive the new payment looks.
How much of a rate drop justifies refinancing?
There is no universal threshold — the old "1% rule" is just a rough guide. What matters is your balance, the costs, and how long you will hold the loan. On a large balance kept for many years, even half a percent can pay off handsomely; on a small balance held briefly, even a full point may not.
Does refinancing hurt my credit score?
A refinance application involves a hard credit inquiry, which can dip your score slightly and temporarily. Multiple mortgage inquiries within a short shopping window (typically 14–45 days) are usually treated as a single inquiry for scoring purposes, so do your rate shopping in a concentrated period.
Can I refinance a loan other than a mortgage?
Yes — auto loans, student loans, and personal loans can all be refinanced, and the same break-even logic applies. This calculator works for any fixed-rate installment loan: enter the current balance, rate, and remaining term alongside the new offer and its costs.