Enter your current loan balance, current rate, remaining term, new rate, new term, and closing costs to calculate your exact monthly payment savings and breakeven horizon.
How to use this calculator
Enter your current mortgage balance remaining.
Enter your existing interest rate and remaining years on your mortgage.
Enter the new offered interest rate, new loan term, and estimated closing costs.
Read your monthly payment savings, breakeven month, and net lifetime savings.
P = current balance, r = monthly rate, n = total months in loan term.
Example
$300,000 balance @ 6.5% (25 yrs) vs 5.25% (25 yrs) with $4,000 costs → Monthly payment drops from $2,025.26 to $1,797.77 (saves $227.49/mo). Breakeven in 18 months.
Key insights
The breakeven point is the exact month where total monthly interest savings equal your upfront refinancing closing costs.
A general rule of thumb is that refinancing is worth considering if you can lower your interest rate by 0.75% to 1.00% or more.
Refinancing into a shorter term (e.g. 30-year to 15-year) may increase your monthly payment slightly but saves massive interest over the life of the loan.
Closing costs typically average 2% to 6% of the loan principal, covering appraisal fees, title insurance, and lender origination fees.
How to interpret your result
Breakeven Horizon
The time required to recoup closing costs. If you plan to sell or move before reaching breakeven, refinancing may result in a net loss.
Monthly Payment Savings
The immediate cash-flow relief gained each month after replacing your higher interest rate.
Lifetime Net Savings
The net dollar benefit after deducting all closing fees from your cumulative interest reductions over the loan lifespan.
Frequently asked questions
How long does it take to breakeven on a mortgage refinance?
Most homeowner refinances reach breakeven within 18 to 36 months, depending on closing costs and the interest rate differential.
Can closing costs be rolled into the new loan?
Yes, many lenders allow you to roll closing costs into the principal, though this increases your loan balance and monthly interest.
Does refinancing affect your credit score?
Applying for a refinance causes a temporary minor drop of 5–10 points due to a hard credit inquiry, which typically recovers within a few months.
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