Mortgage Refinance Calculator

What is a mortgage refinance calculator?

A mortgage refinance calculator compares your current home loan with a proposed new loan. Enter your current balance, rate and remaining term, then the new rate, term and closing costs. The refinance calculator estimates the new payment and shows how the options compare.

The monthly payment comparison helps answer “should I refinance?” But a lower payment alone does not tell you whether the new loan costs less overall. A new term can last longer than the time left on your current loan, so consider both the monthly difference and the total cost shown.

Why mortgage refinance costs matter

A refinance can change the money you have available each month and the amount you pay over the life of the loan. That can affect your household budget, plans to move, or ability to pay down other debt. The break-even estimate helps you consider how long you may need to keep the new loan for monthly savings to offset closing costs.

Compare the calculator’s estimates with Loan Estimates from lenders. Review the proposed rate, payment, closing costs and loan term. The CFPB Loan Estimate explainer can help you understand the document. Check which costs are included and whether the new payment includes the same items as your current payment.

How to use this mortgage refinance calculator

1. Enter your current mortgage balance, interest rate and months left on the loan. Use current loan information rather than the original loan amount or original term.
2. Enter the new rate and proposed term in months. If a lender has offered terms, use those figures; otherwise, test realistic options you are considering.
3. Enter estimated closing costs. Check the lender’s Loan Estimate so you do not overlook costs that apply to your proposed loan.
4. Review monthly savings, break-even and the remaining or total cost estimates. Compare the results with your plans for the home and how long you expect to keep the loan.
5. Test another offer or term by changing the inputs. A shorter term may have a different payment and total cost than a longer term, even at the same new rate.

Mortgage refinance calculator example

How to read your refinance results

Monthly savings is the difference between the current payment and the new payment. A positive result means the estimated new payment is lower. A negative result means it is higher. This figure is useful for budgeting, but it does not show the full cost of borrowing.

Break-even estimates how long monthly savings take to equal closing costs. It uses closing costs divided by monthly savings. If you expect to sell or refinance again before that point, the savings may not make up for the costs under this simple comparison. If monthly savings are zero or negative, this break-even calculation does not show a recovery period through monthly savings.

How to improve a refinance offer

1. 01

   Compare written offers

   Ask lenders for Loan Estimates and compare the rate, term, payment and closing costs. A lower quoted rate may not produce the lowest total cost if its fees or term differ.

2. 02

   Ask about lender fees

   Ask the lender to explain each charge and whether any fees can be reduced or removed. Enter the updated cost estimate in the calculator to see how it changes break-even.

3. 03

   Choose a term that fits your plans

   Compare the proposed term with the time left on your current mortgage. A longer term can lower the payment while extending repayment. Consider a shorter term if paying the loan sooner matters to you, and check whether the payment fits your budget.

4. 04

   Check the full monthly obligation

   Confirm which taxes, insurance and other recurring charges are included in each payment figure. If those amounts differ, compare them separately so the payment change does not give you a misleading budget picture.

Common mortgage refinance calculator mistakes

• Looking only at the payment

  A lower payment can come from extending the repayment period. Compare the new loan’s total cost with the remaining cost of your current loan, not just the monthly difference.

• Leaving out closing costs

  An incomplete cost estimate makes break-even look faster than it may be. Use the lender’s written estimate and update the calculator when fees change.

• Assuming the estimate is a loan offer

  The calculator compares the inputs you provide. The final terms and charges depend on the lender’s offer and your situation. Check the Loan Estimate before making a decision.

• Using different payment components

  If one payment includes taxes or insurance and the other does not, the monthly comparison is not like for like. Confirm what each figure includes before relying on the difference.

The refinance formula

Key terms

Closing costs

Costs charged when you complete a refinance. Enter the estimated costs for the proposed loan.

Break-even

The estimated time for monthly savings to equal closing costs, calculated here as closing costs divided by monthly savings.

Lifetime difference

The calculator’s comparison between the estimated remaining cost of the current loan and the total cost of the new loan.

Loan term

The repayment period for a mortgage, entered in this calculator as months.