Should I Refinance Calculator
Find out if refinancing your mortgage saves money — monthly savings, break-even months, and total interest saved.
Current Mortgage
New Loan
Enter your current mortgage and new loan details to see whether refinancing makes sense.
About the Should I Refinance Calculator
The most common refinancing question is also the most important: does it actually save money? Lowering your rate sounds like an obvious win, but with closing costs typically running 2–5% of the loan balance, the answer is not always yes — and how long you plan to stay in the home makes all the difference.
This calculator answers it directly. Enter your current mortgage details and the terms of the new loan you are considering, and it calculates your monthly savings, how many months until those savings pay back your closing costs (the break-even point), and whether the total interest paid over the life of both loans favors refinancing. You can make an informed decision based on your actual numbers, not a lender's pitch.
The break-even is the key metric: if you plan to move or refinance again before that month, you lose money on the deal. If you stay longer, you come out ahead by the growing cumulative savings. This calculator makes that threshold clear so you can match it against your real plans.
Looking for more options? Open the full Refinance Calculator — it’s the same tool with every feature.
Frequently Asked Questions
How long does it take to break even on a refinance?
Break-even = closing costs ÷ monthly savings. If your closing costs are $5,000 and you save $250/month, you break even at 20 months. If you plan to stay in the home for at least 20 months after refinancing, you save money. If you move or refinance again sooner, you lose money on the deal. Shorter break-even periods (under 18 months) are generally low-risk.
What if I roll closing costs into the loan?
Rolling costs into the loan eliminates the upfront payment but adds to your principal, and you then pay interest on those costs for the life of the loan. This increases the effective cost of refinancing and raises your APR above the stated rate. Use this calculator with the out-of-pocket cost scenario to see the true financial picture.
Is a lower rate always worth refinancing for?
Not always. If you are 20 years into a 30-year mortgage and refinance to a new 30-year loan, you restart the amortization clock — potentially paying more total interest despite the lower rate. A better approach is to refinance into a shorter term (15 or 20 years) or keep making the higher original payment on the new loan to stay on pace with your original payoff schedule.
Understanding Mortgage Refinancing Decisions
When to refinance
Refinancing makes mathematical sense when the break-even point falls comfortably within your expected remaining time in the home, and the total interest comparison over the full loan life favors the new loan. Common triggers: rates have dropped at least 0.5–1%, your credit score improved substantially, you want to remove PMI, or you need to change your loan term. No single trigger is always sufficient — always run the numbers.
The term trap
The most common refinancing mistake is taking a new 30-year term when you have 22 years left on your current mortgage. Even with a lower rate, 8 extra years of payments often means more total interest than your original loan. Compare total interest paid over your actual remaining term in both scenarios — not just the new 30-year schedule — to see whether the refinance truly saves money or just shuffles it around.
Timing with the market
Nobody can perfectly time mortgage rates — they move with economic conditions in ways even professionals cannot predict reliably. A more practical approach: define a target rate that makes financial sense given your break-even threshold and how long you plan to stay, and refinance when rates cross it rather than trying to find the absolute bottom. A bird in the hand (a rate you can lock today) is worth more than the hypothetical ideal rate you might be waiting for.