Refinance Calculator
Enter your current balance, rate and time left, then the new rate, term and closing costs. The calculator shows both monthly payments, how many months it takes for the savings to repay the closing costs, and the difference in total interest. You can also add cash out to see how borrowing more changes the result.
Last updated November 4, 2026
Result
Monthly payment falls by $128.56
| Measure | Value |
|---|---|
| Current payment | $1,264.14 |
| New payment | $1,135.58 |
| New loan amount | $200,000.00 |
| Break-even | 32 months (2 years 8 months) |
| Interest, keep current loan | $255,088.98 |
| Interest, new loan | $208,808.08 |
| Interest difference (current − new) | $46,280.90 |
| Net lifetime savings after closing costs | $42,280.90 |
Closing costs are paid up front, not rolled into the loan. Figures are in today’s dollars with no discounting; taxes, insurance, escrow and the years you already paid are not changed. A new term resets the clock, so a longer term can lower the payment and still raise total interest.
Show the work
Formula: payment = P × r ÷ (1 − (1 + r)^−n); break-even = closing costs ÷ monthly savings (rounded up); net savings = interest difference − closing costs.
- Current payment: $200,000.00 × 0.005417 ÷ (1 − (1 + 0.005417)^−360) = $1,264.14.
- New loan amount: $200,000.00 + $0.00 cash out = $200,000.00.
- New payment: $200,000.00 × 0.004583 ÷ (1 − (1 + 0.004583)^−360) = $1,135.58.
- Monthly savings: $1,264.14 − $1,135.58 = $128.56.
- Break-even: $4,000.00 ÷ $128.56 = 31.11, rounded up to 32 months.
- Interest: $455,088.98 − $200,000.00 = $255,088.98 on the current loan; $408,808.08 − $200,000.00 = $208,808.08 on the new loan. Difference $46,280.90, less $4,000.00 closing costs = $42,280.90.
Result: Monthly payment falls by $128.56
How the refinance comparison is calculated
payment = P × r ÷ (1 − (1 + r)^−n)
break-even months = closing costs ÷ (old payment − new payment)
Both loans use the standard fixed-rate payment formula. P is the amount borrowed, r is the yearly rate divided by 12 and n is the number of monthly payments. At a 0% rate the payment is simply P divided by n. The current loan uses your remaining balance and the months you still have left. The new loan uses the same balance plus any cash out, and the term you choose.
The monthly savings are the old payment minus the new one. Dividing the closing costs by that figure gives the break-even point, rounded up to whole months. If the new payment is the same or higher, there is no break-even, because the closing costs are never repaid by lower payments.
Total interest for each loan is the payment times the number of payments, minus the amount borrowed. The interest difference is the current loan’s interest minus the new loan’s interest. Net lifetime savings subtract the closing costs from that difference, which gives one number for whether the refinance pays off if you keep the new loan to the end.
See how we calculate for the formulas, sources and review schedule behind every calculator.
Also useful alongside this calculator: VA Loan Calculator, Down Payment Calculator and Closing Cost Calculator.
Reading the break-even point
Break-even tells you how long you need to keep the new loan before the lower payment has covered what you paid to get it. If you expect to sell or refinance again before that month, the refinance probably loses money, whatever the new rate looks like.
It is a simple payback period with no discounting, so treat it as a quick test.
Cash-out refinancing
With cash out, the new loan is larger than your current balance, and you receive the difference. The calculator adds the cash-out amount to the new loan, so the new payment and the total interest both rise. The interest difference then compares a larger new loan with a smaller current one, which usually makes the refinance look worse on interest alone.
That comparison is deliberate. The cash you take out is borrowed money that you repay with interest, so it belongs in the result.
What this estimate assumes
Both loans are fixed-rate with equal monthly payments and interest compounded monthly. Closing costs are paid in cash at closing and are not added to the loan. Property tax, insurance, escrow, mortgage insurance and any prepayment penalty on the old loan are not included, so add any such cost to the closing costs field if it applies to you.
A new term starts the clock again. Refinancing a loan with 20 years left into a new 30-year loan can lower the payment mainly because the payments are spread over more years, and that can increase the total interest even at a lower rate. Choose a new term close to the time you have left if you want a like-for-like comparison.
General information, not financial advice
This calculator gives a general estimate from the numbers you enter. It is not financial or tax advice, and your actual results can differ. Check important decisions with a qualified professional or the official source.
How to use the Refinance Calculator
- Enter your current loan balance, interest rate and the time left, in years or months.
- Enter the new interest rate and the term of the new loan.
- Enter the closing costs you expect to pay, and any cash out you want to take.
- Read the new payment, break-even months and interest difference, then Copy, Print or Share.
Worked example
You owe $200,000 at 6.5% with 30 years left, and a new 30-year loan is offered at 5.5%. The payment falls from $1,264.14 to $1,135.58, a saving of $128.56 a month, and total interest falls by $46,280.90. The table shows how different closing costs move the break-even point and the net savings.
| Closing costs | Break-even | Interest difference | Net lifetime savings |
|---|---|---|---|
| $0 | Immediately | $46,280.90 | $46,280.90 |
| $2,000 | 16 months | $46,280.90 | $44,280.90 |
| $4,000 | 32 months | $46,280.90 | $42,280.90 |
| $8,000 | 63 months | $46,280.90 | $38,280.90 |
Frequently asked questions
How is the break-even point for a refinance calculated?
Divide the closing costs by the monthly payment savings and round up to a whole month. For $4,000 of costs and $128.56 saved each month, that is 32 months.
Can a refinance lower my payment but raise my total interest?
Yes. A longer new term spreads the balance over more payments, which lowers each one but adds months of interest. Compare the interest difference as well as the payment.
Should I roll closing costs into the new loan?
This calculator assumes you pay them in cash. If you borrow them instead, add them to the cash-out amount to see the larger loan, and expect to pay interest on them.
What does the cash-out amount do in the calculation?
It is added to your current balance to form the new loan. The new payment and interest are calculated on that bigger amount, so cash out usually reduces or removes any savings.
Why does the calculator say there is no break-even?
The new payment is equal to or higher than the current one, so there are no monthly savings to repay the closing costs. This often happens with cash out or a shorter term.