Mortgage Refinance Calculator

Calculate if refinancing your mortgage saves money. See monthly payment savings, total interest saved, and break-even point in months. Free and easy.

Select Currency
Current Mortgage
%
years
/mo
Refinance Options
%
years

Refinancing saves money if the new rate is at least 0.5-1% lower. Break-even point is when monthly savings cover closing costs.

Refinance Analysis
💰 Monthly Savings: —
Current Monthly Payment—
New Monthly Payment—
Monthly Savings—
Closing Costs—
Break-Even Point—
Total Interest (Current)—
Total Interest (New)—
Interest Savings Over Life—
Net Savings (Interest - Costs)—
Current Mortgage vs. Refinanced Mortgage Comparison
YearCurrent BalanceNew BalanceCurrent PaidNew PaidDifference

Enter details to view comparison schedule.

Year-by-year remaining balance comparison.

Powered by Techraxy | Mortgage Refinance Calculator

ADVERTISEMENT

Relevant Tools

Creator & Reviewer

Hasnain Khan

Co-Founder, Techraxy

Hasnain Khan is a digital tools developer and Co-Founder of Techraxy, a platform dedicated to building modern web-based calculators and utility tools. He focuses on tool optimization, website performance, and creating accessible user experiences across categories like automotive, finance, construction, and everyday utilities.

View Profile

Share:

Rate this Tool

User Ratings:

0
0 out of 5 stars (based on 0 reviews)
Excellent
Very good
Average
Poor
Terrible

ADVERTISEMENT

ADVERTISEMENT

Introduction to Mortgage Refinance Calculator

Mortgage refinancing replaces your existing home loan with a new one, typically to secure a lower interest rate, reduce monthly payments, or shorten your loan term. However, refinancing comes with closing costs that can range from 2% to 5% of the loan amount. This Mortgage Refinance Calculator helps you decide if switching loans makes financial sense. By comparing your current loan against a new offer, you will see exactly how much you could save monthly and over the life of the loan. More importantly, the calculator shows your break-even point – the number of months needed for your monthly savings to outweigh the closing costs. Whether you are considering a rate-and-term refinance, cashing out equity, or shortening from 30 years to 15, this tool provides clear, data-driven answers. Toolraxy built this calculator to help homeowners make confident mortgage refinancing decisions.

How to Use This Mortgage Refinance Calculator

          1. Enter your Current Loan Balance (what you still owe on your mortgage)

          2. Enter your Current Interest Rate (the rate on your existing mortgage)

          3. Enter your Remaining Loan Term (years left on current loan)

          4. Enter the New Interest Rate (the rate you are being offered)

          5. Enter the New Loan Term (typically 15, 20, or 30 years)

          6. Enter the Closing Costs for the new loan (lender fees, points, appraisal, etc.)

          7. Click Calculate to see your savings and break-even point

          8. Adjust any input to compare different refinance scenarios

Formula Section

Current monthly payment:

text
Current Payment = Current Balance × [ r1(1+r1)^n1 ] / [ (1+r1)^n1 – 1 ]

New monthly payment:

text
New Payment = Current Balance × [ r2(1+r2)^n2 ] / [ (1+r2)^n2 – 1 ]

Monthly savings:

text
Monthly Savings = Current Payment – New Payment

Break-even point (months):

text
Break-Even = Closing Costs ÷ Monthly Savings

Total interest saved:

text
Interest Saved = (Current Total Interest Remaining) – (New Total Interest)

Where:

  • r1 = Current monthly interest rate (current rate ÷ 12 ÷ 100)

  • n1 = Remaining months on current loan

  • r2 = New monthly interest rate (new rate ÷ 12 ÷ 100)

  • n2 = New loan term in months

  • Closing Costs = Fees to originate the new loan

 

Real-Life Examples Section

  • Example scenario:

    • Current loan balance: $300,000

    • Current interest rate: 7.5%

    • Remaining term: 28 years (336 months)

    • New interest rate: 5.75%

    • New loan term: 30 years

    • Closing costs: $6,000

    Results:

    • Current monthly payment: $2,098

    • New monthly payment: $1,751

    • Monthly savings: $347

    • Total interest remaining (current): $406,000

    • Total interest on new loan: $330,000

    • Total interest saved: $76,000

    • Break-even point: 18 months

    Clear takeaway: Refinancing from 7.5% to 5.75% saves 347 per month and 76,000 in total interest. After 18 months, the $6,000 closing cost is recovered. If you plan to stay in your home longer than 18 months, refinancing makes excellent financial sense.

 

FAQs

1. What is mortgage refinancing?
Mortgage refinancing means replacing your existing home loan with a new one. Homeowners typically refinance to get a lower interest rate, reduce monthly payments, shorten their loan term, or access home equity through a cash-out refinance.

2. How do I know if refinancing my mortgage is worth it?
Refinancing is worth it if your monthly savings multiplied by your expected time in the home exceeds the closing costs. This is called the break-even point. If you plan to stay past the break-even date, refinancing makes financial sense.

3. What is a good break-even period for mortgage refinancing?
Most financial experts recommend refinancing if you can break even within 12 to 24 months. If break-even takes 3+ years, consider whether you plan to stay in the home that long.

4. How much do mortgage refinance closing costs typically cost?
Closing costs for refinancing usually range from 2% to 5% of the loan amount. On a 300,000loan,expect6,000 to $15,000. Common fees include origination fees, appraisal, title search, credit report fees, and recording fees.

5. Does refinancing reset my mortgage term?
Yes, unless you choose a shorter term. For example, if you are 5 years into a 30-year loan and refinance into a new 30-year loan, you reset the clock to 30 years. This can lower payments but increase total interest if you do not pay extra. Consider a 15 or 20-year term instead.

6. What is the difference between rate-and-term refinance and cash-out refinance?
Rate-and-term refinance changes your interest rate or loan term without taking additional cash. Cash-out refinance replaces your loan with a larger one, allowing you to take the difference in cash for home improvements, debt consolidation, or other needs.

7. How does my credit score affect mortgage refinancing?
A higher credit score qualifies you for lower interest rates. Most lenders require a minimum credit score of 620 for conventional refinancing. FHA refinance may allow scores as low as 500 with certain conditions. VA refinance typically requires 580-620.

8. Can I refinance if I have less than 20% equity in my home?
Yes. Conventional refinancing typically requires at least 5% equity (95% loan-to-value). FHA and VA refinance options may allow higher LTV ratios. However, you may pay private mortgage insurance (PMI) if your equity is below 20%.

Disclaimer

This Mortgage Refinance Calculator is provided for educational and planning purposes only. Results are based on standard loan amortization formulas and the numbers you enter. Actual refinance approval depends on credit score, home appraisal value, debt-to-income ratio, employment history, lender-specific requirements, and current market conditions. This tool does not guarantee loan approval, specific interest rates, or closing costs. Consult a licensed mortgage lender or financial advisor before making refinancing decisions. Toolraxy is not responsible for any actions taken based on these calculations.

ADVERTISEMENT

ADVERTISEMENT