Home and property
Mortgage refinance calculator
Enter your loan balance and what is left on the current loan, then the new rate, term, and closing costs. Payments are principal and interest only.
What this means
- Closing costs are paid back by monthly savings after about 25 months.
- Over the life of both loans you save $30,751.62 in interest after costs.
- If you might sell or refinance again before the break-even month, the refinance may not pay off.
What if
About this calculator
What this calculator does
It compares the payment left on your current mortgage with a new loan for the same balance. It divides closing costs by the monthly savings to find the break-even month.
How it is calculated
payment = B * i / (1 - (1 + i)^-n)
break-even months = closing costs / monthly savings, rounded up (right away with no costs; not shown past the new term)
lifetime saving = remaining interest now - (new loan interest + closing costs)
How to read the result
Monthly savings is current payment minus new payment. Lifetime savings can be negative even when the payment drops, because a fresh 30-year term adds years of interest.
Assumptions and limits
Closing costs are paid in cash, not rolled into the loan. Taxes, insurance, and mortgage insurance are not included.
Sources and method
Standard fixed-rate amortization: M = P * r * (1 + r)^n / ((1 + r)^n - 1) with r as the annual rate / 12. Totals use the unrounded payment, then round to the cent. Unit tests check published worked examples. Break-even months = closing costs / monthly savings, rounded up.
Questions
What is the break-even point?
The month when your total monthly savings equal the closing costs. After that, the refinance is ahead.
Why can lifetime interest go up?
Restarting at 30 years spreads the balance over more months, which can add interest even at a lower rate.
Are taxes and insurance included?
No. They usually stay the same after a refinance.
What if I roll costs into the loan?
Add the closing costs to the balance and set closing costs to 0 to model that.