What is the mortgage refinance calculator?
In short
To decide whether to refinance, compare your new monthly payment to your current one and divide closing costs by the monthly savings to find your break-even month. Example: refinancing $280,000 from 7.25% (22 years left) to 6.0%/30yr with $5,000 in closing costs cuts your payment from $2,104 to $1,679 — a $425/month saving that breaks even in about 12 months.
This mortgage refinance calculator compares your existing loan against a new one. It shows your new monthly payment, monthly savings, the number of months to break even on closing costs, and the lifetime interest savings over the full loan term.
How to use this calculator
- 1Enter your current remaining loan balance.
- 2Enter your current interest rate and the number of months left on the loan.
- 3Enter the new interest rate you've been offered and the new loan term.
- 4Add the estimated closing costs (typically 2–5% of the loan amount).
- 5Review the monthly savings, break-even period, and total lifetime savings.
The formula
- M
- — Monthly payment
- P
- — Principal (loan amount)
- r
- — Monthly interest rate (annual rate ÷ 12)
- n
- — Total number of payments (months)
Worked example
The scenario
You have $280,000 remaining at 7.25% with 22 years left. You're offered 6.0% for 30 years. Closing costs are $5,000.
The result
Your monthly P&I drops from $2,104 to $1,679, saving $425/month. You break even on closing costs in about 12 months. Over 30 years you save $47,600 in total interest (net of closing costs).
Common use cases
- Deciding whether to refinance after rates have dropped
- Comparing a rate-and-term refinance vs a cash-out refinance
- Calculating how long you need to stay in your home to benefit
- Evaluating different loan terms (15 vs 30 years) at the new rate
Limitations & assumptions
- Does not account for PMI removal, which can add extra savings when refinancing above 20% equity.
- Closing costs vary widely by lender, state, and loan size — get a Loan Estimate for exact figures.
- Assumes you keep the new loan to term; actual savings change if you move or refinance again.
Frequently asked questions
When does it make sense to refinance?
What are typical closing costs to refinance?
Should I refinance to a 15-year or 30-year loan?
What is a no-closing-cost refinance?
How does refinancing affect my taxes?
Can I refinance if I'm underwater on my mortgage?
Does refinancing restart my amortization clock?
What credit score do I need to refinance?
Disclaimer: KalkWise calculators are provided for general informational and educational purposes only and do not constitute financial, investment, tax, or legal advice. Results are estimates based on the figures you enter and the assumptions described above. Actual outcomes will vary. Consult a qualified professional before making financial decisions.