Mortgage Refinance Calculator — Monthly Savings & Break-even | money-calc.com

Free mortgage refinance calculator. See monthly savings, break-even point in months, and lifetime interest savings vs closing costs. Should you refinance?

Two tests every refinance must pass

A refinance has to clear a short-term and a long-term hurdle. Short term: monthly savings must repay the closing costs — the break-even is simply closing cost ÷ monthly savings. Long term: total interest over the new loan's life, plus closing costs, must come in below the interest remaining on the old loan. The calculator computes both from full amortization schedules rather than rules of thumb.

Worked example with hypothetical rates

A $300,000 balance at 7% with 25 years remaining costs $2,120.34 per month. Refinanced to a 5.5%, 25-year loan it costs $1,842.26 — saving $278.08 monthly. With $6,000 of closing costs the break-even lands at about 21.6 months, and lifetime savings net of costs reach $77,422.53. Rates are illustrative; actual offers, taxes, and fees vary, so treat results as informational.

How to Use

  1. Current Loan Balance — Enter the remaining principal on your existing mortgage
  2. Current Rate & Remaining Term — Enter your present interest rate and the years left on the loan
  3. New Rate & Term — Enter the rate and term of the replacement loan you are evaluating
  4. Closing Cost — Enter the estimated refinancing costs — typically 2–5% of the loan amount
  5. Calculate — Click Calculate to see monthly savings, break-even months, and lifetime savings net of costs
  6. Interpret the Outcome — Look beyond the monthly saving: the tool flags whether the deal is a true net gain or only improves cash flow

FAQ

How is the refinance break-even calculated?

Break-even = closing cost ÷ monthly savings. If you save $200/month and pay $4,000 in closing costs, you break even in 20 months.

Does extending the term save money?

Extending the term lowers monthly payments but increases total interest paid. The calculator shows lifetime savings net of closing costs so you can see the full picture.

What closing costs should I include?

Typical closing costs are 2–5% of the loan and include origination fees, appraisal, title insurance, and prepaid items. Get a Loan Estimate from your lender for exact figures.

How is lifetime savings computed?

The calculator builds full amortization schedules for both loans — your current balance at the current rate over the remaining term, and the same balance at the new rate over the new term — then subtracts total new interest and closing costs from total old interest.

What does a cash-flow-only result mean?

Your monthly payment drops but lifetime savings are negative — usually because the new term runs much longer than your remaining term, so you pay interest for more years. The calculator cross-checks both views precisely to surface this trap.

Does the calculator assume I refinance the full balance?

Yes — the new loan principal equals your current remaining balance, and closing costs are treated as a separate upfront expense. Cash-out refinancing and rolling costs into the loan are not modeled.