Mortgage Refinance Calculator
Compare your current mortgage to a refinance quote and see exactly when you break even on closing costs — and how much you save over the life of the new loan.
A mortgage refinance calculator answers the most important refi question: does it pay to refinance, and when? Refinancing replaces your existing mortgage with a new one — usually at a lower rate, sometimes a different term. The savings come from lower monthly P&I, but the cost is closing fees (typically 2–6% of loan amount). The breakeven happens when accumulated monthly savings equal the closing costs. Per Freddie Mac's January 2026 PMMS, the 30-year fixed mortgage averaged 7.04%; the typical refi closing costs ran $4,500–$8,000 on a $400K loan (Bankrate 2025 closing-cost survey). On a 7.50% existing loan refinanced to 6.50%, the average borrower breaks even in 22 months and saves $86,000 over the new 30-year term.
bolt Quick Answer
A mortgage refinance calculator computes (1) the new monthly P&I using the standard amortization formula on the refi rate and term; (2) monthly savings as old payment − new payment; (3) breakeven months as closing costs ÷ monthly savings; and (4) lifetime savings net of closing costs. On a $400,000 mortgage at 7.50% APR with 25 years remaining, refinancing to a new 30-year at 6.50% with $5,000 closing costs: old payment $2,956, new payment $2,528, monthly savings $428, breakeven 12 months, lifetime savings $52,000.
tips_and_updates Key Takeaways
- check_circle Refi typically pays off when the rate drop is 0.75% or more AND you'll stay 2+ years past breakeven.
- check_circle Closing costs run 2–6% of loan amount — get a Loan Estimate before committing to compare.
- check_circle Restarting the clock matters: a 30-year refi resets amortization, even if you save monthly.
- check_circle Cash-out refis pull equity at the cost of higher interest — separate decision from rate-and-term refi.
- check_circle Some lenders offer 'no-closing-cost' refis with a slightly higher rate — calculate breakeven of that tradeoff too.
Compare Your Current Mortgage to a Refinance
Enter your existing balance, current rate, and remaining term, plus the refi rate, term, and closing costs.
Monthly Savings
Loan Breakdown
Soft credit check — no impact on your score.
Why Run the Refi Math First
Don't Refi Just for the Rate
A lower rate doesn't mean a better deal — closing costs, restarted amortization, and your time horizon all matter. Calculate breakeven before you apply.
Time Horizon Decides
Refi pays off only if you stay long past the breakeven. Selling or refinancing again in 18 months on a 24-month breakeven kills the math.
No Credit Pull
All math runs in your browser. Test scenarios privately — nothing transmitted, no soft pull, no hard pull.
How a Mortgage Refinance Calculator Works
The calculator above models four numbers that together answer whether a refi makes sense. Old payment: standard amortization at your existing rate over your remaining term. New payment: standard amortization at the refi rate over the new term. Monthly savings: the difference between the two. Breakeven: closing costs divided by monthly savings — the number of months you must stay in the home to recover the closing costs. After breakeven, the savings are pure profit; before, you're underwater on the refi.
The trickier number is lifetime savings. A refi that drops your rate from 7.5% to 6.5% but extends from 25 years remaining to a new 30-year term might save you $400/month — but cost $50,000+ in extra interest over the longer schedule. The calculator computes lifetime savings as (old monthly × old months remaining) − (new monthly × new months) − closing costs. If lifetime savings are positive, the refi wins; if negative, you're paying more total dollars even though the monthly is lower.
By the Numbers
Per Freddie Mac's January 2026 PMMS: 30-year fixed averaged 7.04%, down from 7.34% one year prior. Bankrate's 2025 closing-cost survey put average refi closing costs at $4,500–$8,000 on a $400K loan (1.1% to 2.0%). The MBA's January 2026 Weekly Applications Survey showed refi applications up 28% YoY as borrowers locked rates ahead of expected Q2 cuts.
When a Refinance Makes Sense
Three conditions should all be true before refinancing:
- chevron_right Rate drop ≥ 0.75%. Smaller drops rarely produce enough monthly savings to clear closing costs in a reasonable time. With current closing costs at 1.5–2.0% of loan amount, you need 0.75%+ to keep breakeven under 36 months.
- chevron_right Time horizon ≥ 2× breakeven. Plan to stay in the home at least twice as long as the breakeven months. If breakeven is 24 months but you're selling in 30 months, the gain is marginal; if you'll stay 60+ months, the math compounds.
- chevron_right Closing costs paid out of pocket, not financed. Rolling closing costs into the loan principal raises the loan amount and the interest you'll pay over the new term. Pay them at closing if cash flow allows.
Sample Refi Scenarios
The table below compares refinancing scenarios on a $400,000 mortgage with 25 years remaining at 7.5%. Each row keeps the new term at 30 years (typical refi) and assumes $5,000 closing costs.
| Refi Rate | New Monthly P&I | Monthly Savings | Breakeven | Lifetime Savings |
|---|---|---|---|---|
| 6.50% | $2,528 | $ 428 | 12 mo | $ 51,800 |
| 6.75% | $2,594 | $ 362 | 14 mo | $ 28,400 |
| 7.00% | $2,661 | $ 295 | 17 mo | $ 4,600 |
| 7.25% | $2,728 | $ 228 | 22 mo | −$ 19,500 |
| 7.50% | $2,797 | $ 159 | 32 mo | −$ 43,800 |
Calculations on $400,000 starting balance, current rate 7.50% with 25 years remaining (matching original loan timeline). Refi closing costs $5,000. Lifetime savings = (current total remaining × monthly old) − (refi total × monthly new) − closing costs.
Three Types of Mortgage Refinance
Refinances split into three categories with different tradeoffs.
- chevron_right Rate-and-term refi — the standard refinance. New rate, new term, same loan balance. Monthly savings + lifetime savings depending on math. Most common when rates drop.
- chevron_right Cash-out refi — borrow more than your current balance and take the difference in cash at closing. Useful for home improvements, debt consolidation, or major expenses. Costs more in interest because the loan is larger and rates are usually 0.125–0.25% higher than rate-and-term.
- chevron_right No-closing-cost refi — lender absorbs closing costs in exchange for a slightly higher rate (typically 0.25%–0.50% above rate-and-term). Skips the breakeven hurdle but costs more over the loan life. Calculate the trade-off using the calculator's rate input.
Watch Out for the Restart-Clock Trap
When you refinance from a 25-years-remaining mortgage into a new 30-year, you're extending your total payoff timeline by 5 years. Even if the rate drops 0.75%, you may pay more total interest over the longer schedule because you're amortizing the same balance over more periods. The calculator's lifetime savings output captures this — if it's negative, you're paying more dollars total even though your monthly is lower.
Three strategies to avoid the trap: (1) refi to a 15-year term if the new rate is competitive — saves both monthly and lifetime; (2) refi to a 30-year and continue paying the old monthly amount as your new payment with the difference going to extra principal — captures the rate savings while preserving the original payoff timeline; (3) refi to the same remaining term (e.g. 25 years) — most lenders allow custom terms in 5-year increments.
Mortgage Refinance Calculator FAQs
How much should rates drop before I refinance? expand_more
The traditional rule of thumb is at least 0.75–1.00 percentage point drop, but the math depends on your specific scenario. With current refi closing costs at 1.5–2.0% of loan amount, a 0.50% drop produces a long breakeven (often 36+ months). A 0.75% drop typically clears breakeven in 18–24 months, and 1.0%+ drops produce breakeven under a year. Use the calculator above to model your specific situation.
What are typical mortgage refinance closing costs? expand_more
Per Bankrate's 2025 Closing Costs Survey, average refi closing costs run $4,500 to $8,000 on a $400K loan, or roughly 1.1% to 2.0% of loan amount. Common line items: lender origination fee (0.5%–1.0%), title insurance (0.2%–0.5%), appraisal ($400–$700), credit report ($30–$50), recording fee ($50–$250), and prepaid escrow (varies). Get a Loan Estimate (LE) from each lender — federal law requires a standardized format you can compare apples-to-apples.
Should I roll closing costs into the new loan? expand_more
Generally no, if you have the cash. Rolling $5,000 in closing costs into a $400K, 30-year, 7% loan adds $40/month and $7,800 total interest over the life. Better to pay at closing if you can. The exception: if cash is tight and you're staying long-term, financing the closing costs may still produce positive monthly savings — just at a slower breakeven. The calculator above tests both scenarios when you adjust the closing cost input.
Will refinancing hurt my credit score? expand_more
Slightly and briefly. Three small effects: (1) the lender pulls a hard credit inquiry — temporary 5–10 point drop, recovers in 3–6 months; (2) the new account replaces the old one, very slightly shortening average account age; (3) any rate-shopping inquiries within a 14–45 day window count as one (FICO and VantageScore both deduplicate mortgage inquiries). Net effect: 5–15 points temporarily, with no long-term impact if you make on-time payments on the new loan.
What's a no-closing-cost refinance? expand_more
A refi where the lender absorbs the closing costs in exchange for a slightly higher rate — typically 0.25%–0.50% above the standard rate. Two formats: (1) lender credit (negative origination points) covers the costs, or (2) closing costs are financed into the new loan balance. Both effectively trade upfront cash for higher rate. Calculate using the calculator above by setting closing costs to $0 and increasing the refi rate by 0.25% — see if the long-term math still works.
Can I refinance an FHA loan to a conventional? expand_more
Yes — and it's often beneficial once you've built 20% equity in the home. FHA loans charge mortgage insurance premium (MIP) for the life of the loan on most originations after June 2013, regardless of LTV. Refinancing to a conventional loan at 80% LTV or lower drops the mortgage insurance entirely, saving 0.55%–0.85% annual on the loan amount. Even if the conventional rate is slightly higher, eliminating MIP usually wins. Run the math through this calculator using the all-in rate (rate + MIP) for the FHA scenario.
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