What is the break-even point in refinancing?

The break-even point is the number of months it takes for your cumulative monthly savings to equal the closing costs you paid upfront. If you sell or refinance again before that point, you will not have recovered the cost of refinancing.

What closing costs should I enter?

Typical refinance closing costs run 2% to 5% of the loan principal and include origination fees, appraisal, title insurance, and prepaid interest. Ask your lender for a Loan Estimate document that lists all expected costs.

Does the calculator account for taxes and insurance?

No. The monthly payment shown is principal and interest only. Property taxes and homeowner's insurance (escrow) are the same regardless of which loan you choose, so they do not affect the savings calculation.

Should I refinance to a shorter term even if the payment goes up?

A shorter term typically means a higher monthly payment but much less total interest paid. Use the total interest row to compare lifetime costs. If you can comfortably afford the higher payment, a shorter term often saves tens of thousands of dollars.

How does extending my term affect savings?

Extending the term lowers your monthly payment but increases total interest paid over the life of the loan. The calculator shows both metrics so you can weigh short-term cash flow relief against long-term cost.

Is this calculator accurate for adjustable-rate mortgages (ARMs)?

This tool uses fixed interest rates for both loans. For ARMs, use the current fully-indexed rate as an approximation. Future rate adjustments are not modeled.

Mortgage Refinance Calculator

Name: Mortgage Refinance Calculator
Availability: InStock
Author: Nham Vu

Enter your current mortgage details and new loan terms to instantly see monthly savings, break-even month, and lifetime interest saved.

Current Loan

Remaining Balance

Interest Rate

Remaining Term

New Loan (Refinance)

New Loan Amount (leave blank to use current balance)

New Interest Rate

New Term

Closing Costs (optional)

Typical range: 2–5% of loan amount. Used to compute the break-even period.

Enter your loan details on the left and click Calculate.

Monthly Savings

per month

Current Payment

—

per month

New Payment

—

per month

Break-Even

—

months

Loan Comparison

Metric	Current	Refinanced	Difference
Loan Amount	—	—	—
Interest Rate	—	—	—
Term	—	—	—
Monthly Payment	—	—	—
Total Interest	—	—	—
Total Cost	—	—	—

Summary

Enter your current mortgage details and new loan terms to instantly see monthly savings, break-even month, and lifetime interest saved.

How it works

Enter your current loan balance, interest rate, and remaining term in months or years.
Input the new interest rate and term you are considering for the refinance.
Add your estimated closing costs (typically 2–5% of the loan balance).
The calculator computes both monthly payments using the standard amortization formula.
Review monthly savings, break-even period, and total interest saved over the full term.

Use cases

Deciding whether to refinance when rates have dropped since your original mortgage.
Comparing a shorter loan term against a lower rate to see the total cost difference.
Estimating how many months it takes to recoup closing costs from monthly savings.
Evaluating a cash-out refinance where the balance increases.
Running multiple scenarios to find the optimal new rate and term combination.
Planning how long you need to stay in the home for refinancing to make financial sense.

Frequently Asked Questions

Last updated: 2026-06-09 · Reviewed by Nham Vu