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Refinance calculator

Put your current loan and a refinance offer on the scale. You get the new payment, the month the costs are paid back, and how far ahead (or behind) you'll be by the time you expect to sell or pay it off.

Your current loan

today

Current payment (principal & interest): $2,006.95/mo ·

The refinance offer

new
Until you sell, pay off or refinance again
Leave 0 if you don't pay PMI or it stays
Worth a close look: it breaks even in 2 yr 1 mo and you are $17,188 ahead after 8 yr.
Keep current$650,253
Refinance$629,908

Total still to pay, including refinance costs

New payment
$1,732was $2,007
Monthly change
−$275less each month
Break-even
2 yr 1 mosimple method: 2 yr
After 8 yrs
$17,188ahead
Interest left, current
$365,253
Interest, new loan
$338,408

Your net position, month by month

$36,375$14,938−$6,500now5y10y15y20y25y30ybreak-even 2 yr 1 mo
Ahead (+) or behind (−) vs keeping your loan

Counts refinance costs, the payment difference and the difference in what you still owe. Crossing zero is the true break-even.

Same offer, other terms

New termPaymentTotal costvs keepingBreak-even
10 yr$3,182$388,340save $261,9121 yr 8 mo
15 yr$2,424$442,871save $207,3821 yr 10 mo
20 yr$2,062$501,484save $148,7691 yr 11 mo
27 yrmatches time left$1,801$589,915save $60,3382 yr 1 mo
30 yr$1,732$629,908save $20,3442 yr 1 mo

At 6.125% with the same costs. "vs keeping" compares everything still to pay on your current loan.

Ask about these numbers

An AI analyst reads your inputs and results above and explains them. The calculator works without it.

What a refinance actually changes

Refinancing replaces your loan with a new one. Three things move at once: the rate, the term and the costs you pay to switch. Most refinance quotes lead with the new monthly payment, which only captures the first of those, and sometimes not even that honestly.

That's why this calculator weighs total remaining cost, not just the payment. A lower payment that comes from stretching a loan back to 30 years can leave you paying more in the end. The toggle on the right shows exactly how that happens.

People often ask whether the mortgage-interest deduction tips the balance. It's worth less than it sounds: the saving depends on your marginal rate, and only if you itemise. If "marginal" is a fuzzy word, this bracket-by-bracket demo on ahaboo makes it concrete in a few minutes.

Three numbers to have ready

  • Your payoff balance and rate from your latest statement.
  • Time left on the loan, in years.
  • The offer's rate and total costs: on a US mortgage, sections A to C of the Loan Estimate cover lender and third-party charges.

The term-reset trap

Payment
$2,129 → $1,749
Debt-free in year
30 → 37
Still to pay from today
$587,595 → $629,539$41,944 more, despite a lower rate

A lower rate cuts interest per dollar, but a fresh 30-year term adds years of payments. Matching the time you have left (or paying the old amount on the new loan) keeps the full rate benefit.

Break-even is where the line crosses zero

aheadbehindmonth 280y2y4y6y8y10y

$5,000 ÷ $180 = 28 months. Keep the loan longer than that and the refinance pays; sell or refinance sooner and it costs you. Double the costs and the crossing moves twice as far out.

Break-even, and why it's only half the answer

Break-even is the month when the money you saved finally covers what the refinance cost. Before then, switching left you worse off; after it, you're ahead.

The quick version divides costs by the monthly saving. Our break-even calculator also tracks the balance on each loan, because a longer new term pays down principal more slowly. That's the chart in the results panel above.

Then check your plans. If you'll likely move, sell the car or refinance again before break-even, the deal loses money no matter how nice the rate looks. For a structured walk-through, read Should I refinance?.

Questions people ask

What is the 2% rule for refinancing?
It is an old rule of thumb: refinance only if the new rate is at least 2 percentage points below your current one. It ignores your balance, costs and how long you will keep the loan. Today's lower-cost refinances can pay with a much smaller drop, while a 2-point drop on a small, nearly paid-off loan may not. Break-even time against your plans is a better test.
How much does it cost to refinance a $300,000 home?
Using Freddie Mac's typical range of 2% to 6% of the loan amount, closing costs on a $300,000 refinance would run roughly $6,000 to $18,000. Lender fees, points, title insurance and state taxes drive the spread. Our closing costs guide estimates each line item for your loan size.
How do I calculate my refinance payment?
Monthly payment = P × r ÷ (1 − (1 + r)^−n), where P is the new loan amount (including any rolled-in costs), r the monthly rate (annual rate ÷ 12) and n the number of months. $300,000 at 6% for 30 years is $1,798.65 a month. The calculator above does this for you and compares it with your current payment.
How do I know if refinancing is worth it?
Refinancing is worth it when you will keep the new loan longer than its break-even point and the total you still have to pay goes down, or when a lower payment matters more to you than the total. Enter your numbers above: the calculator shows both the break-even month and the net position at the date you expect to sell or pay off.
What is a good rate drop to refinance?
There is no fixed rule. The old "1 percentage point" rule of thumb ignores costs and time. A 0.5-point drop on a large mortgage you will keep for ten years can beat a 1.5-point drop on a small car loan with high fees. Break-even time against how long you will keep the loan is the test that works for every loan size.
What is the difference between simple and true break-even?
Simple break-even divides closing costs by the monthly payment saving. True break-even also counts the difference in what you still owe on each loan. When a refinance stretches the term, your balance falls more slowly, so the true break-even arrives later than the simple one. LoanOptim shows both.
Should I roll closing costs into the loan?
Rolling costs in avoids paying cash today, but you then pay interest on those costs for the whole term and the monthly saving shrinks. If you have the cash, paying upfront usually costs less over time. Tick the "roll the costs in" box to compare both on your numbers.
Does refinancing hurt my credit score?
Applying causes a hard inquiry, which typically lowers a score by a few points for a short time. Credit scoring models from FICO treat several mortgage or auto-loan inquiries within a short shopping window as one, so comparing several lenders in the same few weeks costs no more than applying once.

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