Refinance Comparison Estimator

Monthly Payment (Amortization Formula)

Where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments. This is applied separately to your current loan (using its remaining balance and term) and your proposed new loan.

Monthly Savings

Breakeven Point

This tells you how long you need to stay in the home before the monthly savings from refinancing outweigh what you paid in closing costs. If you plan to sell or refinance again before this point, the refinance may not be worth it.

Total Interest Difference

Calculated separately for the current loan (over its remaining term) and the new loan (over its full new term), then compared. Because the terms often differ, this comparison should be read alongside the monthly savings and breakeven figures, not in isolation.

Common Uses for This Calculator

• Rate-and-term refinance: See if a lower rate justifies the closing costs
• Shortening your loan term: Compare payment increase against interest saved by moving from a 30-year to a 15-year loan
• Extending your term: See how much a lower monthly payment costs you in extra total interest
• Deciding on points: Test how paying more upfront in closing costs for a lower rate affects your breakeven point
• Timing decisions: Figure out whether you’ll stay in the home long enough to benefit

Worked Example: Rate Drop vs. Moving-Timeline Risk

Say you have 210,000 remaining on a 30-year mortgage at 6.5%, with 22 years left. A lender offers you a refinance at 5.25% over a fresh 30-year term, with 4,000 in closing costs paid upfront (not rolled in).

On the surface this looks attractive — you’d recover the closing costs in under a year. But stretching back out to a fresh 30-year term means you’re financing the balance over 8 extra years compared to your original 22 remaining, which can increase total lifetime interest even at a lower rate. If your priority is minimizing total interest rather than monthly cash flow, pairing the lower rate with a shorter new term (say, 22 or 25 years) instead of resetting to 30 would usually serve you better — this calculator lets you test that trade-off directly by changing the “New Loan Term” field.

Frequently Asked Questions

What counts as “closing costs” for a refinance?

Typically origination fees, appraisal fees, title insurance, recording fees, and sometimes discount points — your lender’s loan estimate will itemize the exact figure for your situation.

Should I roll closing costs into the loan or pay them upfront?

Rolling them in avoids an upfront cash outlay but means you pay interest on those costs for the life of the loan; paying upfront costs more today but keeps your new loan balance — and total interest — lower.

Why does resetting to a new 30-year term matter if the payment is lower?

A lower monthly payment can come from a lower rate, a longer term, or both. If the new term is longer than your remaining time on the current loan, you may pay more total interest over the life of the loan even though each individual payment is smaller.

What’s a good breakeven point?

There’s no universal number, but many advisors suggest refinancing makes more sense if you expect to stay in the home well beyond the breakeven point — otherwise the closing costs may not be recovered before you sell or refinance again.

Does this account for cash-out refinancing?

Not directly. This calculator compares a like-for-like payoff of your current balance against a new loan. A cash-out refinance, where you borrow more than your current balance, would need a higher “current loan balance” or new principal entered manually to reflect the extra cash taken out.

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