Quick start
- Open the Refinance Calculator.
- Enter the current balance, current rate, and remaining years on the loan you already have.
- Use the first example, "Mortgage refinance: $280,000 balance, 7% now, 26 years left, 5.9% new 30-year loan, $4,500 costs", if you want to see a filled-out estimate before entering your own values.
- Calculate, read the formula line, then copy the result only after the amounts, percentages, time periods, or assumptions look right.
Best uses
Start here if one of these sounds like your job. The examples below show which inputs matter most.
- Compare a current loan with a possible refinance.
- Estimate monthly savings from a lower rate.
- Check how long closing costs may take to break even.
- See whether a longer term could reduce payment but increase cost.
What this calculator is for
The Refinance Calculator compares the loan you have now with a new loan. It is best for checking whether a lower payment comes from a better rate, a longer term, or costs being rolled into the new balance.
Good fit examples: Compare a current loan with a possible refinance. Estimate monthly savings from a lower rate.
What to enter
Finance estimates are sensitive to small input changes. Check whether a field expects a monthly amount, annual amount, dollar value, or percent before calculating.
- Enter the current balance, current rate, and remaining years on the loan you already have.
- Enter the new rate, new term, and closing costs from the refinance idea you want to test.
- Use closing costs as dollars. This calculator adds those costs to the new principal, so the new loan balance starts higher.
Example walkthrough
Try the calculator example: Mortgage refinance: $280,000 balance, 7% now, 26 years left, 5.9% new 30-year loan, $4,500 costs. The example result is About $1,687.47/month, $263.67/month savings, and 17.1 months to break even.
- $280,000 at 7% with 26 years left is about $1,951.15 per month in this model.
- A new 30-year loan at 5.9% with $4,500 costs rolled in starts at $284,500 and is about $1,687.47 per month.
- That saves about $263.67 per month, so the simple break-even is about 17.1 months.
Formula and steps
In plain language: The calculator estimates the current loan payment, rolls closing costs into the new balance, estimates the new payment, then compares monthly payment and total cost. Break-even only appears when the new payment is lower. If the new payment is higher, the calculator shows no monthly-savings break-even.
If the estimate looks surprising, check the formula and inputs before using the answer in a budget, comparison, or planning note.
How to read the answer
Start with the headline result. Then read the supporting lines to see what made the number larger or smaller, such as rates, time periods, costs, taxes, fees, discounts, or contributions.
- Monthly savings is useful, but it is not the whole story.
- Break-even months shows about how long the payment savings may take to cover closing costs.
- Total cost change helps catch the sneaky part: a longer new term can lower the monthly payment but still raise total cost over time.
- If the new payment is higher, the calculator shows no monthly-savings break-even.
Common mistakes to avoid
Most bad finance estimates come from mixing rates, terms, monthly amounts, and annual amounts. The other common mistake is using a planning estimate as if it were a final quote.
- Do not ignore closing costs, escrow changes, points, prepaids, lender fees, title fees, appraisal fees, and prepayment penalties.
- Do not call a refinance better just because the monthly payment drops.
- Do not treat interest rate and APR as the same thing when fees or points are part of the quote.
- Do not use this as a loan disclosure. Use the lender Loan Estimate and Closing Disclosure for real terms.
What to try next
A related money tool can help check the same question from another angle before you rely on one result.
- Use APR Calculator if points or lender fees make two refinance offers hard to compare.
- Use Mortgage Payoff Calculator if extra payments on the current loan may be simpler.
- Use Mortgage Calculator when you want the full payment picture with taxes and insurance.
Sources and estimate notes
This guide links to public financial, consumer, statistical, or tax references where they are useful for understanding the calculator context.
Source links improve transparency, but they do not turn a quick calculator into professional advice or a final loan, tax, payroll, or investment answer.
Worked examples for Refinance Calculator
About $1,687.47/month, $263.67/month savings, and 17.1 months to break even
About $1,852.47/month, no monthly savings, but about $113,367.40 lower total paid
About $1,379.61/month, $76.32/month savings, and 19.7 months to break even
FAQ in plain language
When should I use the Refinance Calculator?
Use it when you want to test the exact inputs on this page: Compare a current loan with a possible refinance. Estimate monthly savings from a lower rate. The result is a check against your assumptions, not proof that a lender, tax app, broker, platform, or provider will use the same number.
What do the main Refinance Calculator inputs mean?
Current balance means what is still owed on the loan you already have. Current rate means the yearly rate used to estimate your remaining current payment. Current remaining term means how many years are left if you keep the current loan. New rate means the yearly rate for the refinance idea you want to test. New term means how many years the new loan would run. Closing costs means the refinance costs entered as dollars. This calculator rolls them into the new balance.
What does refinance break-even mean?
Break-even means the rough number of months it takes monthly savings to cover closing costs. If costs are $4,500 and the new payment saves about $263.67 per month, the simple break-even is about 17.1 months.
Can a refinance lower my payment but still cost more?
Yes. A new 30-year term can drop the monthly payment by stretching the debt over more months. Always compare total cost change, not only the new payment.
Why does this calculator roll closing costs into the new balance?
It gives one clean comparison where the new loan starts with the current balance plus entered costs. If you plan to pay costs out of pocket, compare that separately with your lender paperwork.
What is the Refinance Calculator doing with my numbers?
In plain language: The calculator estimates the current loan payment, rolls closing costs into the new balance, estimates the new payment, then compares monthly payment and total cost. Break-even only appears when the new payment is lower. If the new payment is higher, the calculator shows no monthly-savings break-even.
How should I read the Refinance Calculator answer?
Start with the new monthly payment, then read monthly savings, break-even time, and total cost change. A lower payment is only helpful if the costs and longer term still make sense.
Related tools
- Mortgage Payoff Calculator Estimate early mortgage payoff time, interest saved, and months saved from extra principal payments.
- APR Calculator Estimate loan APR from amount borrowed, note rate, term, and upfront finance charges.
- Mortgage Calculator Estimate monthly principal, interest, taxes, insurance, PMI, and HOA costs.
Keep exploring
If this guide is close but not exact, these links keep you near the same kind of problem.
- Finance Browse the full category for related tools that help with the same job.
- All free tools Search the complete Access Free Tools library by task, category, or tool name.
- All calculator and utility guides Find more plain-language examples, formulas, mistakes, and result explanations.
- Free calculator resources Start here when you are not sure which calculator page fits.
Privacy and copying results
Recent answers stay visible only while you work in the current browser tab. They are not sent to a server.
Use Copy answer when you want to save the inputs and result in notes, homework, a message, or a project list. Check the units, labels, and limits before copying.