Payment & interest clarity
Shows current vs new P&I, break-even month, and interest saved so audiences understand real trade-offs.
Scroll Down for Details
Know Your Break Even Before You Refinance
This calculator compares your current mortgage to a new refinance offer so you can see payment differences, break-even months, and lifetime interest impact. Enter your real numbers (balance, rate, years left, closing costs, points) and instantly see whether a refi makes financial sense.
Quick Start Checklist
- Enter your current balance, rate, and years remaining. Use the override field if your P&I differs from the formula.
- Provide the new rate and term, then add closing costs and points. Check “roll closing costs” if you plan to finance them.
- Click Calculate to see monthly savings, break-even months, and interest comparisons. Share results with the button on the summary bar.
Use the summary cards to communicate current vs new P&I, monthly savings, break-even month/date, interest saved, and net savings after costs when discussing plans with your lender or advisor.
Should You Refinance in 2025?
Run side-by-side scenarios to see how rate drops, longer terms, or rolling costs affect your monthly payment and lifetime interest. Pair this with the Mortgage calculator to visualize amortization and the Home Affordability tool to check budget fit.
Compare Current Loan vs New Loan With Data, Not Guesswork
Enter your current balance, rate, and years remaining alongside a proposed refinance rate and term. This calculator computes your exact P&I, monthly savings, break-even month, and lifetime interest impact. Adjust assumptions to mirror your lender quote, test rolling vs paying closing costs, and export shareable results for partners or clients.
Break-even month calculator
Current vs new P&I
Interest saved & net savings
Shareable summary cards
Make Sense of Your Refinance Scenario
This calculator compares your current loan to a new refinance offer, focusing on principal & interest so you see true payment differences. It highlights the month you break even on closing costs and how much interest you save over the life of the new loan. Use it to pressure test assumptions about points, rolling costs into the loan, and term length changes.
- Customize closing costs: include lender fees, appraisal, title, and points. Decide whether to roll them into the loan or pay at closing.
- Model term changes: switching from 24 years remaining to a fresh 30-year term may lower payments but increase total interest. See the trade-off instantly.
- Validate real quotes: plug exact APRs and payment overrides to mirror lender disclosures.
Refinance Calculator FAQs
Should I refinance my mortgage?
Use this should I refinance calculator to decide. Refinancing makes sense when: (1) you can lower your rate by 0.5-1%+, (2) the break-even point is under 36 months, and (3) you plan to stay in your home beyond the break-even date. If you're moving soon or the savings don't offset closing costs, keep your current loan.
How do I calculate refinance break-even?
Calculate refinance break-even by dividing total closing costs by monthly savings. Formula: Break-even months = Closing costs ÷ Monthly savings. For example, $3,000 closing costs ÷ $200 monthly savings = 15 months to break even. This refinance break-even calculator does this automatically and shows the exact date you'll recoup your costs.
What is a good break-even point for refinancing?
A good break-even point refinance is 12-36 months. If you'll break even in under 3 years and plan to stay longer, refinancing likely makes sense. Break-even periods over 60 months are risky unless lifetime interest savings are substantial. Target the shortest break-even possible while still securing meaningful rate reductions.
How much can I save by refinancing my mortgage?
This refinance savings calculator shows exact savings. Typical scenarios: refinancing from 7% to 6% on a $300,000 loan saves ~$200/month ($2,400/year) and $50,000+ in lifetime interest. Your actual mortgage refinance calculator results depend on your current rate, new rate, loan balance, and remaining term.
Does the calculator include taxes and insurance?
No. The model compares principal & interest only so you can isolate financing changes. Escrow items may change slightly over time but are independent of refinancing in most cases.
Is rolling closing costs into the loan smart?
Rolling costs preserves cash but increases principal and monthly payment slightly. If break-even months remain reasonable and net savings stay positive, financing costs can still be wise.
How do points affect break-even?
Points increase upfront cost but reduce your rate. The calculator adds points to effective closing costs (or principal if rolled) and shows how the lower rate impacts monthly savings and lifetime interest.
Can I share or embed these refi results?
Yes. Use the Share button to copy a link, post to social, or grab an embed code with the summary cards and chart.
Why This Refinance Calculator Helps You Decide
The page targets intent-rich phrases like “refinance break-even calculator,” “should I refinance,” and “mortgage refi savings.” The math mirrors lender disclosures and advisor workflows, which boosts user trust and search relevance.
Share-ready UI
Gradient cards, scroll prompts, and one-click sharing make it easy to distribute results across channels.
Topical authority
FAQs, assumptions, and methodology paragraphs provide long-form copy that satisfies search crawlers.
- Break-even clarityFind the exact month you recoup closing costs.
- SEO readyTargets refinance break-even keywords and questions.
- Share powerCopy link or embed without reworking design.
Link to Related Calculators for Higher Rankings
Interlinking across mortgage decisions keeps visitors exploring while reinforcing topical breadth. Reference these calculators in your content strategy to capture more keywords.
Mentioning these tools in blogs or lender guides builds internal links, increases dwell time, and signals that this page anchors the refinance topic.
Complete Guide to Mortgage Refinancing
Refinancing your mortgage can save tens of thousands of dollars in interest, lower your monthly payment, or help you pay off your home faster. However, refinancing isn't always the right move. This comprehensive guide breaks down when to refinance, how to calculate your break-even point, and strategies to maximize savings.
When Does Refinancing Make Sense?
Refinancing makes financial sense in specific situations. Here's when to consider it:
Scenarios Where Refinancing Wins
- Rate drop of 0.5%+: Traditional rule says refinance when rates drop 1-2%, but modern low closing costs make 0.5% worthwhile if you'll stay 3+ years.
- Credit score improved: If your score jumped from 680 to 740+, you may qualify for rates 0.5-1% lower than your original loan.
- Switching from ARM to fixed: If you have an adjustable-rate mortgage and rates are rising, locking into a fixed rate provides payment certainty.
- Removing PMI: If your home appreciated or you paid down principal to 80% LTV, refinancing eliminates PMI ($100-300/month savings).
- Cash-out refinance needs: Tapping equity at mortgage rates (5-7%) beats personal loans (10-15%) or credit cards (18-25%) for major expenses.
- Shortening loan term: Refinancing from 30-year to 15-year at lower rates accelerates payoff and slashes total interest paid.
Understanding Break-Even Analysis
The break-even point is when your cumulative monthly savings equal your closing costs. Before break-even, you're losing money; after break-even, you're saving.
Break-Even Example
Current Situation:
- Remaining balance: $300,000
- Current rate: 6.5%
- Years remaining: 25
- Current P&I: $2,027/month
Refinance Offer:
- New rate: 5.25%
- New term: 30 years
- New P&I: $1,656/month
- Monthly savings: $371
- Closing costs: $6,500
Break-Even Calculation: $6,500 closing costs ÷ $371 monthly savings = 17.5 months to break even. After 18 months, you start saving real money. Over 5 years, you save $22,260 - $6,500 = $15,760 net.
Refinancing Costs Breakdown
Understanding what you're paying for helps you negotiate better and compare lenders accurately:
Typical Refinance Closing Costs ($300K Loan)
- Application fee: $300-$500 (sometimes waived)
- Appraisal: $400-$600 (required to verify home value)
- Credit report: $25-$50 (lender pulls credit)
- Title search & insurance: $700-$1,200 (ensures clear ownership)
- Attorney/settlement fees: $500-$1,000 (varies by state)
- Lender origination fee: 0.5-1% of loan ($1,500-$3,000 on $300K)
- Recording fees: $50-$250 (government filing charges)
- Survey fee: $300-$500 (if lender requires property survey)
- Prepaid interest: Varies (interest from closing to first payment)
- Points (optional): 1% = $3,000 for ~0.25% rate reduction
Total typical range: $4,000-$10,000 (1.5-3% of loan amount). Shop multiple lenders to compare total costs, not just rates.
Points: Should You Pay to Lower Your Rate?
Discount points are upfront fees you pay to permanently lower your interest rate. Each point costs 1% of the loan amount and typically reduces your rate by 0.25%.
Points Analysis: $300K Loan Example
No Points Option:
- Rate: 5.5%
- Monthly P&I: $1,703
- Closing costs: $6,000
Buy 2 Points (-0.5% rate):
- Rate: 5.0%
- Monthly P&I: $1,610
- Monthly savings: $93
- Points cost: $6,000 (2% of $300K)
- Total closing costs: $12,000
Points break-even: $6,000 extra cost ÷ $93 monthly savings = 65 months (5.4 years). Only buy points if you'll stay 6+ years. Otherwise, the upfront cost isn't recovered.
Cash-Out Refinance vs Rate-and-Term Refinance
Two main types of refinancing serve different goals:
- Rate-and-term refinance: Changes your interest rate or loan term but keeps loan balance the same. Goal is to lower payment or accelerate payoff.
- Cash-out refinance: Borrows more than you owe and gives you the difference in cash. New loan might be $350K on a house where you owe $300K; you get $50K cash (minus closing costs). Used for home improvements, debt consolidation, or investment opportunities.
- Cash-in refinance: Less common - you bring money to closing to lower loan balance, secure better rates, or eliminate PMI.
Warning on cash-out refis: Rates are typically 0.25-0.5% higher than rate-and-term refis. Also, tapping equity reduces your cushion if home values decline. Only do cash-out refinancing for value-adding purposes (home improvements, high-interest debt payoff), not lifestyle spending.
15-Year vs 30-Year Refinance Decision
Choosing your new term length dramatically affects total interest paid and monthly cash flow:
Term Comparison: $250K Refinance
30-Year Fixed at 5.5%:
- Monthly P&I: $1,419
- Total interest paid: $260,840
- Total cost: $510,840
15-Year Fixed at 5.0%:
- Monthly P&I: $1,976
- Total interest paid: $105,680
- Total cost: $355,680
- Interest savings: $155,160
- Higher monthly payment: $557 more/month
Decision factors: Choose 15-year if you can comfortably afford higher payments and want to retire mortgage-free sooner. Choose 30-year if you need cash flow flexibility, prefer to invest the payment difference, or aren't confident in income stability.
When NOT to Refinance
Refinancing isn't always smart. Avoid refinancing when:
- You plan to move within 2-3 years: You won't hit break-even before selling, losing money on closing costs.
- Your credit score dropped: You'll get worse rates than your current loan, making refinancing counterproductive.
- You're close to payoff: If you have 5-7 years left on a 30-year mortgage, refinancing to a new 30-year term extends debt and increases total interest despite lower monthly payments.
- Rates haven't dropped enough: If current rates are only 0.25% lower and you have decent time left, savings may not justify costs and hassle.
- Your home value declined: If you're underwater (owe more than home's worth) or close to it, you won't qualify for good refi rates. May need to wait for appreciation or principal paydown.
- You have prepayment penalties: Some mortgages charge penalties for paying off early. Check your current loan docs before refinancing.
How to Get the Best Refinance Rate
Maximize your savings by following these strategies:
- Shop 3-5 lenders: Rates and fees vary significantly. Get loan estimates from banks, credit unions, and online lenders to compare total costs.
- Improve your credit score first: Pay down credit cards, dispute errors, avoid new credit inquiries. Even a 20-point score increase can save 0.25% in rate.
- Boost your equity position: If you're at 78% LTV, paying extra principal to hit 75% LTV gets you into better rate tiers and eliminates PMI.
- Lock your rate strategically: Rate locks last 30-60 days. Lock when rates are favorable and you can close within the lock period. Extending locks costs money.
- Negotiate fees: Application fees, origination fees, and some third-party fees are negotiable. Ask lenders to waive or reduce them.
- Consider timing: Refinance applications spike when rates drop, causing processing delays. Apply early when rates first dip for faster service.
- Bundle services: Some lenders discount if you also open checking accounts or have other relationships. Ask about relationship pricing.
Tax Implications of Refinancing
Understand how refinancing affects your taxes:
- Mortgage interest deduction: You can deduct interest on up to $750,000 of mortgage debt ($375,000 if married filing separately). Refinancing resets this but doesn't change deduction limits.
- Points deduction: Points paid on a refi must be deducted over the life of the loan (amortized), not all in year one like purchase points. On 30-year refi with $3,000 in points, you deduct $100/year.
- Cash-out refinance limits: Cash-out proceeds used for home improvements are deductible. Cash used for other purposes (debt consolidation, vacation, investments) is not deductible.
- Closing cost deductions: Most closing costs aren't deductible. Only points and prepaid interest have tax benefits.
- Consult a CPA: Tax laws change and individual situations vary. Work with tax professionals to optimize your refinance tax strategy.
Refinancing is a powerful tool to save money, but only when executed strategically. Use this calculator to model multiple scenarios, compare break-even timelines, and share results with your financial advisor or spouse before committing. The best refinance is one that aligns with your financial goals, timeline, and risk tolerance.
For additional analysis, check our Mortgage Calculator to compare amortization schedules, or use the Home Affordability Calculator to ensure your new payment fits your budget comfortably.
Refinance Playbook: From Quote to Shareable Decision
- Enter lender details. Fill in the current balance, rate, years left, then the proposed refi rate, term, and closing costs.
- Stress test scenarios. Adjust points, roll costs into the loan, or try alternate terms to see sensitivity.
- Educate stakeholders. Use the Share dropdown to copy a link, embed the calculator, or post results directly to social.
- Capture search demand. Embed the calculator in blog posts or landing pages; the canonical stays on simplefinancecalculators.com for SEO credit.
This workflow keeps the page sticky, signals expertise, and encourages organic backlinks from mortgage and real estate communities.
⚠️ Important Legal & Financial Notice
- Educational purposes only This refinance calculator is an educational model only; it is not a loan offer or a substitute for advice from licensed mortgage, legal, or tax professionals.
- Variable costs Rates, closing costs, points, taxes, insurance premiums, and lender program eligibility vary by jurisdiction and credit profile. Obtain official disclosures before refinancing.
- Not a qualification tool The tool does not evaluate your underwriting requirements, prepayment penalties, or regulatory compliance. Speak with a licensed loan officer and attorney to understand obligations.
- Projections may vary Break-even months and lifetime interest projections assume constant rates and on-time payments. Actual performance may differ materially.
- Your responsibility You are solely responsible for complying with federal, state, and local lending laws and for reporting any required tax information related to your mortgage.
Link copied to clipboard!