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Refinance

Refinance Calculator: Should you refinance?

Refinancing $400,000
Monthly payment drops by
$430

New payment $2,271 against $2,701 today. You break even after 12 months. Over the life of both loans you lose $12,368 after $5,000 in closing costs.

Principal and interest only; taxes, insurance and PMI usually do not change when you refinance.

The new loan runs 5 years longer than what you have left, which is where the lifetime cost comes from.

How we calculate this

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Pin locks in exactly what you see now, so finish your edits first. Then change any value, and the two are shown side by side.

Nothing changed yet.
Cumulative cost of each loan
What you have paid on each path by the end of each year, closing costs included. Use Previous and Next, or drag on the chart, to read any year.
Refinancing starts behind by the closing costs and crosses the current loan in month 12, during year 1.
  • Keep the current loan
  • Refinance, including closing costs
$0$300k$600k$900kKeep the current loanRefinance, including closing costsbreak even, month 12Year 1Year 10Year 20Year 30
Year 30
Keep the current loan $810,249
Refinance $822,616
Refinance behind by $12,368
Year-by-year table
Your scenario. Tap any value to change it.

You owe at with left. A new loan at costs to close.

Break-even
12 months. That is $5,000 of closing costs divided by $430 saved each month.
Lifetime saving
$12,368 of extra cost over the life of both loans, after closing costs.
Term
30 years, 5 years longer than the 300 months you have left.
Year by year

Cumulative out of pocket on each path. Year 1 is the break-even year.

YearCurrent loan paidRefinance paidDifference
1$32,410$32,254+$156
2$64,820$59,508+$5,312
3$97,230$86,762+$10,468
4$129,640$114,015+$15,624
5$162,050$141,269+$20,780
6$194,460$168,523+$25,936

How this refinance calculator works

We compute your current monthly payment from your remaining balance, rate, and months left, and the new payment from the offered rate and term. The difference is your monthly saving (if any). Closing costs divided by that saving gives your break-even month, the first month you are actually ahead.

  • Payment formula: M = P × r(1+r)n / ((1+r)n − 1), 0% APR amortizes linearly.
  • Lifetime savings: remaining interest on the old loan minus (total interest on the new loan plus closing costs).
  • We flag term extension when the new term reaches further out than your current loan, so the monthly drop is not mistaken for free money.

Full methodology and sources

Frequently asked questions

What is the break-even month on a refinance?
It is the number of months of monthly savings needed to recover the closing costs you pay upfront. If your closing costs are $5,000 and the refi saves $400/mo, you break even in month 13. Before that, refinancing has cost you more than it has saved.
Why can a lower monthly payment still cost me more?
If you refinance into a fresh 30 year loan when only 22 years were left on your current one, you have stretched the loan by 8 years. Total interest paid over those extra years can outweigh the monthly savings. Look at lifetime savings, not just the monthly drop.
Does this include taxes, insurance, or PMI?
No. The break-even math is on principal and interest only, because that is what changes when you refinance. Property taxes, homeowners insurance, and PMI generally do not, so including them on both sides would cancel out.
How do I figure out my remaining months and balance?
Check your latest mortgage statement: it shows principal balance and the original loan term. Subtract months already paid from the original term in months (e.g. 360 minus 60 for a 5-year-old 30-year loan = 300 remaining months).