💰 Refinance Calculator
Calculate refinancing savings
How to Use This Calculator
Enter Current Loan Details
Input your current loan balance, interest rate, and remaining loan term. This represents your current mortgage or loan situation.
Enter New Loan Details
Enter the new interest rate and loan term for the refinance loan you're considering. This will be compared to your current loan.
Enter Closing Costs (Optional)
Enter estimated closing costs for the refinance. This is used to calculate the break-even point - how long it takes to recoup the costs.
Review Refinance Analysis
See monthly savings, break-even point, and whether refinancing makes financial sense. Use this to make informed refinancing decisions.
Formula
Monthly Payment = P × [r(1 + r)ⁿ] / [(1 + r)ⁿ - 1]
Monthly Savings = Current Payment - New Payment
Break-Even Months = Closing Costs ÷ Monthly Savings
Example Calculation:
If current balance $200,000, current rate 6%, new rate 4%, term 30 years, closing costs $3,000:
• Current payment: ~$1,199/month
• New payment: ~$955/month
• Monthly savings: $244/month
• Break-even: $3,000 ÷ $244 = ~12.3 months
About Refinance Calculator
A refinance calculator helps you determine if refinancing your loan makes financial sense. Refinancing involves replacing your current loan with a new loan, typically to get a lower interest rate, reduce monthly payments, or change the loan term. This calculator compares your current loan to a refinance option, showing you monthly savings, total savings, and the break-even point (how long it takes to recoup closing costs). Understanding these numbers helps you make informed refinancing decisions.
When to Use This Calculator
- Refinance Evaluation: Evaluate if refinancing saves money
- Rate Comparison: Compare current rate to new rate
- Break-Even Analysis: Determine break-even point with closing costs
- Payment Planning: See new monthly payment amount
Understanding Refinancing
- Lower Rate: Primary reason to refinance (reduce interest)
- Closing Costs: Fees paid to refinance (typically 2-5% of loan amount)
- Break-Even: Time to recoup closing costs through savings
- Term Change: Can change loan term (15 vs. 30 years)
- Cash-Out: Can refinance to take cash out of equity
Why Use Our Calculator?
- ✅ Savings Calculation: See exact monthly and total savings
- ✅ Break-Even Analysis: Determine if refinancing pays off
- ✅ Payment Comparison: Compare current vs. new payments
- ✅ Decision Support: Make informed refinancing decisions
- ✅ 100% Free: No registration or payment required
Frequently Asked Questions
When does refinancing make sense?
Refinancing makes sense when: (1) You can get a significantly lower interest rate (typically 0.5-1% lower), (2) You'll recoup closing costs within a reasonable time (break-even), (3) You plan to stay in the home/keep the loan long enough to benefit, (4) The total savings exceed closing costs. Generally, if break-even is less than 2-3 years and you'll stay longer, refinancing may make sense.
What are refinancing closing costs?
Refinancing closing costs typically include: origination fees, appraisal fees, title insurance, recording fees, and other fees. Total costs are typically 2-5% of the loan amount. For example, a $200,000 refinance may have $4,000-$10,000 in closing costs. Some lenders offer "no-cost" refinancing by rolling costs into the loan or increasing the rate.
What is the break-even point?
The break-even point is how long it takes to recoup your closing costs through monthly savings. For example, if closing costs are $3,000 and you save $250/month, break-even is 12 months. If you'll stay in the home/keep the loan longer than the break-even point, refinancing makes financial sense. Shorter break-even is better.
Should I refinance if I'm reducing the term?
Refinancing to a shorter term (e.g., 30 to 15 years) typically increases monthly payments but saves significant interest over time. If you can afford the higher payment, a shorter term saves money long-term. Use this calculator to see the payment difference and total savings. Consider your budget and financial goals.