Refinance Calculator
A lower rate isn't automatically a win — closing costs come first. Find your new payment, your monthly savings, and the break-even month after which the refinance truly pays off.
Your current loan
Typically 2–5% of the loan amount. “No-closing-cost” refinances fold these into a higher rate instead.
Your result
Watch the term: restarting a 30-year clock lowers the payment partly by stretching the loan, not just by the lower rate. Compare lifetime savings, not just the monthly figure.
How refinance break-even works
Refinancing trades an upfront cost (closing costs) for a stream of monthly savings. The break-even point is simply when the accumulated savings catch up to the cost — after that month, you're ahead; if you sell or refinance again before it, you lost money on the deal.
Break-even months = closing costs ÷ monthly payment savings. Lifetime savings = (total payments remaining on the current loan) − (total payments on the new loan) − closing costs.
The subtle trap is the term reset. Refinancing 27 remaining years into a fresh 30-year loan adds three years of payments; the monthly drop looks bigger than the rate improvement alone justifies. Refinancing into a term that matches your remaining years (or a shorter one) keeps the comparison honest — try the 20- and 15-year options above.
Frequently asked questions
How much lower should the new rate be?
The old rule of thumb said 1%, but what matters is your break-even versus how long you'll keep the loan. With low closing costs, even a 0.5% drop can pay off in under two years; with high costs, a 1% drop might never break even if you move soon. Run your real closing-cost quote through this calculator rather than relying on the rule.
Should I roll closing costs into the loan?
It avoids cash at closing but means paying interest on the costs for decades — $6,000 rolled into a 6% loan costs about $12,900 over 30 years. Paying cash is cheaper if you have it; rolling in can still make sense when the alternative is draining your emergency fund.
Does refinancing hurt my credit?
Expect a small, temporary dip from the hard inquiry and the new account lowering your average account age. Rate-shopping multiple lenders within a short window (typically 14–45 days depending on the scoring model) counts as a single inquiry for mortgage purposes.