calculator.financialcalculator.financial

Mortgage Refinance Calculator

Compare your current home loan to a new refinance loan. Calculate monthly payment savings, total interest reduced, and estimate your break-even timeline.

$
%
years

New Refinance Loan

%
years

Refinance Costs

$
%
Roll closing costs into loan
Monthly Payment Savings
$227.88
Break-Even Timeline
2.3 years
(27 months)
Total Interest Saved
$68,363.50
Net Lifetime Savings
$62,363.50
Refinancing your remaining balance of $300,000 from 6.50% to 5.25% will reduce your monthly payment from $2,025.62 to $1,797.74. This saves you $227.88 per month. With upfront refinancing costs of $6,000.00, you will reach the break-even point in 27 months (2.3 years). Over the life of the new loan, your net lifetime savings will be $62,363.50, including $68,363.50 saved in interest charges.
Monthly Savings$227.88

Amortization Comparison Schedule

Yearly breakdown comparing current and new loan balances, payments, and net cumulative savings
YearCurrent BalanceNew BalanceCurrent Cumulative PaidNew Cumulative Paid + FeesCumulative Interest SavedNet Cumulative Savings
1$295,046.70$294,034.90$24,307.46$27,572.92$3,746.34-$3,265.46
2$289,761.67$287,749.00$48,614.92$49,145.84$7,481.76-$530.92
3$284,122.70$281,125.02$72,922.37$70,718.75$11,201.30$2,203.62
4$278,106.07$274,144.79$97,229.83$92,291.67$14,899.44$4,938.16
5$271,686.49$266,789.15$121,537.29$113,864.59$18,570.04$7,672.70
6$264,836.98$259,037.92$145,844.75$135,437.51$22,206.31$10,407.24
7$257,528.75$250,869.80$170,152.20$157,010.42$25,800.73$13,141.78
8$249,731.08$242,262.39$194,459.66$178,583.34$29,345.01$15,876.32
9$241,411.18$233,192.06$218,767.12$200,156.26$32,829.98$18,610.86
10$232,534.08$223,633.91$243,074.58$221,729.18$36,245.58$21,345.40

Understanding the Refinance Break-Even Point

Refinancing can lower your payment, but comes with closing costs (appraisal, title insurance, application fees). The break-even month is when your cumulative monthly savings cover the upfront costs:

Break-Even Month = Total Upfront Refinancing Costs ÷ Monthly Payment Savings

For example, refinancing a $300,000 balance from 6.5% to 5.25% reduces the monthly payment by $227.88. With $3,000 in closing costs, the break-even point is reached in 14 months.

Frequently asked questions

How do I calculate the break-even point for refinancing?

Divide your total refinancing closing costs by your monthly savings. For example, if refinancing costs $3,000 and saves you $150 a month, your break-even point is 20 months ($3,000 ÷ $150). If you plan to stay in the home longer than 20 months, refinancing is financially beneficial.

Should I roll closing costs into the refinance loan?

Rolling closing costs into the loan reduces your upfront out-of-pocket costs to $0, but increases your total loan principal. You will pay interest on those closing costs over the life of the loan. It is usually better to pay costs upfront if you have the cash, to maximize monthly savings.

What are mortgage discount points?

Discount points are upfront fees paid to the lender in exchange for a lower interest rate. One point typically costs 1% of the total loan amount and lowers the interest rate by 0.25%. Calculate if the monthly savings from the lower rate offset the upfront points cost before buying them.