Refinance Calculator — Free 2026

Refinancing replaces your current mortgage with a new one, ideally at a lower rate or a term that fits your goals better. But refinancing is not free — closing costs can run thousands of dollars — so the real question is whether the monthly savings outrun those costs before you sell or move. This calculator answers that by showing your new payment, your monthly savings, and your break-even point.

How the comparison works

Enter your current loan balance, rate, and remaining term, then the new rate and term you are considering along with estimated closing costs. The calculator computes both payments, the monthly difference, and how many months of savings it takes to recover the closing costs — your break-even point.

The break-even point explained

Break-even months = total closing costs ÷ monthly savings. If refinancing costs $6,000 and saves you $250 a month, you break even in 24 months. Stay in the home past that point and the refinance pays off; sell before it and you lose money on the deal.

A worked example

Say you owe $300,000 at 7.5% with 27 years left, and you can refinance to 6.25% over 30 years. Your payment might drop from about $2,150 to $1,847 — a $303 monthly saving. With $7,000 in closing costs, you break even in roughly 23 months. If you plan to stay at least a few more years, the refinance clearly makes sense.

Things to watch before you refinance

• Resetting a 27-year loan back to 30 years lowers the payment but can increase total interest — consider matching your remaining term.
• A general guideline is to refinance when you can cut your rate by at least 0.5–1%, but the break-even math matters more than any rule.
• Cash-out refinances raise your balance and payment — use them cautiously and only for high-value purposes.
• Ask lenders for a no-closing-cost option and compare the slightly higher rate against paying costs upfront.

Worked example: is this refinance worth it?

Suppose you owe $300,000 on a loan at 7.25% with 27 years left. Your current principal-and-interest payment is about $2,113. A lender offers a new 30-year loan at 6.0% with $6,000 in closing costs. The new payment would be about $1,799, a savings of roughly $314 a month. Dividing $6,000 by $314 gives a break-even point of about 19 months, so if you expect to stay in the home longer than that, the refinance pays for itself.

The table shows a trap many borrowers miss. Resetting to a fresh 30-year term lowers the payment the most, but it also adds three years of payments. Choosing a 27-year term at the new rate keeps you on your original payoff date and saves about $78,000 in interest versus staying put. The 15-year option raises the payment by about $378 but cuts remaining interest by more than half. The right choice depends on whether your priority is monthly cash flow or total cost.

Questions to ask before you refinance

• How long will I stay in the home? If you might move before the break-even month, the refinance probably loses money.
• Am I rolling closing costs into the loan? Financing them is convenient but you pay interest on them for the life of the loan.
• Are points worth it? Paying one point (1% of the loan) to lower the rate only makes sense if you keep the loan well past the point’s own break-even.
• Can I drop PMI? If your home has appreciated to give you 20% equity, a refinance may eliminate mortgage insurance, which adds to the monthly savings.
• Is my credit in good shape? Refinance pricing is heavily tied to credit score and loan-to-value ratio.

A cash-out refinance follows the same math with one extra question: what is the cash for? Using home equity to consolidate high-interest credit card debt can lower your overall interest cost, but only if you avoid running the cards back up. Using it for spending turns short-term purchases into 30-year debt secured by your house.