Refinance Calculator: Mortgage Refinance Calculator - Break-Even & Savings Estimator
Calculate if refinancing your mortgage makes financial sense. See monthly savings, break-even point, PITI comparison, and lifetime interest — with smart personalized advice.
For illustrative and educational purposes only. Not financial advice.
How the same refinance compares if you pay closing costs in cash versus finance them into the new loan balance.
How this refinance calculator works
This takes your current loan balance, rate, and years remaining, and compares your current monthly principal & interest payment against a new loan at your proposed rate and term. If you choose to finance your closing costs, they're added to the new loan balance before the new payment is calculated; if you pay cash, they're treated as an upfront cost used only for the break-even calculation. The amortization chart projects both balances year by year so you can see how the payoff timelines actually compare.
Why break-even matters more than the rate
A lower rate only helps if you stay in the loan long enough to recoup what refinancing cost you. The break-even point divides your upfront closing costs by your monthly savings — if you plan to move or refinance again before that point, the new loan likely cost you more than it saved. Financing the closing costs removes the upfront hit but doesn't remove the cost; you simply pay interest on it for the life of the loan instead.
Why lifetime interest can matter more than the monthly number
Resetting to a new 30-year term after you've already paid down several years of a 30-year loan restarts amortization — more of each early payment goes to interest again. A lower rate can still increase total lifetime interest if it resets the clock by enough years, so it's worth comparing total interest paid, not just the monthly payment.
Frequently Asked Questions (FAQ)
What is the break-even point on a refinance?
The break-even point is how many months it takes for your monthly savings to add up to more than what you paid in closing costs. If you sell or refinance again before that point, the refinance likely cost you money overall.
Should I pay closing costs in cash or roll them into the loan?
Paying cash avoids financing interest on the closing costs and is usually cheaper over the life of the loan. Rolling them into the balance avoids an upfront cash outlay but means you pay interest on those costs for the full loan term.
Does refinancing change my property tax and insurance payments?
No. Refinancing changes your principal and interest payment. Property tax and homeowners insurance are set independently and are simply added on top to form your full PITI payment, whether you refinance or not.
Is a lower interest rate always worth refinancing for?
Not automatically. A lower rate can still cost you more overall if it resets you into a longer term, since you restart amortization and pay interest on the full balance for more years. Compare total lifetime interest, not just the rate or the monthly payment.