Refinance Calculator — old vs new mortgage/payment + savings.
Refinance Calculator
Compare your current mortgage to a refinance and estimate monthly savings, lifetime savings, and break-even timing.
Current vs. refinanced loan
Old vs. new comparison
| Category | Current loan | Refinanced loan |
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When refinancing can make sense
Refinancing can reduce a mortgage payment when the new rate is meaningfully lower than the current rate, or when the borrower extends or shortens the term in a way that changes the financial outcome.
It is important to compare the payment, the total borrowing cost, and the break-even period. Closing costs can offset the savings from a lower monthly payment, especially if the borrower plans to move soon or if the loan balance is relatively small.
The best refinance is not automatically the lowest payment. A borrower may prefer a lower rate, a lower total lifetime cost, or a shorter payoff timeline depending on their goals and budget.
- Lower rates can reduce monthly payments and lifetime interest.
- Closing costs reduce the net benefit of refinancing.
- Break-even timing helps assess whether the refinance is worthwhile.
- Shorter terms can increase the payment but reduce total cost.
Frequently asked questions
What does the calculator compare?
It compares the current mortgage payment and cost to a new mortgage payment based on a lower rate, new term, and closing costs.
How is monthly savings calculated?
Monthly savings equals the current monthly payment minus the new monthly payment, assuming the new payment is lower.
What is break-even?
Break-even is the point when the refinancing savings cover the closing costs. It is usually estimated as closing costs divided by monthly savings.
Does a lower payment always mean a better refinance?
Not necessarily. A lower payment can still be a worse deal if it extends the term too far or if closing costs are high and the borrower does not stay in the home long enough to recover them.
What about closing costs?
Closing costs reduce the net value of a refinance. They are included in the savings model so the estimated benefit reflects both payment reduction and total cost.
Is this a lender approval guarantee?
No. This is an educational estimate and does not guarantee that a lender will approve the loan or offer the same rate in final underwriting.