🏦 Refinance Savings Calculator
Compare your current mortgage with a new refinanced loan. See monthly payment changes, total interest savings, break-even point, and make an informed decision about refinancing.
What Is a Refinance Savings Calculator?
A refinance savings calculator helps you determine whether refinancing your mortgage is a good financial decision. It compares your current loan with a potential new loan, showing you the difference in monthly payments, total interest paid, and the break-even point.
Refinancing can lower your monthly payment, reduce your interest rate, or change your loan term. However, closing costs and fees can offset these benefits. This calculator helps you see the big picture so you can make an informed decision.
How Does the Refinance Savings Calculator Work?
The calculator performs the following steps:
- Calculates your current monthly payment — based on your current balance, interest rate, and remaining term.
- Calculates your new monthly payment — based on your current balance (plus closing costs rolled in), new interest rate, and new term.
- Computes total interest paid — for both the current and new loan over their respective terms.
- Calculates total savings — the difference in total interest paid minus closing costs.
- Determines the break-even point — how many months it takes for your monthly savings to cover the closing costs.
- Shows amortization comparison — year-by-year balance and interest paid for both loans.
Why Use This Refinance Savings Calculator?
- Instant Results: See your monthly payment change, total savings, and break-even point in seconds.
- Side-by-Side Comparison: Compare your current and new loan terms at a glance.
- Amortization Comparison: See year-by-year how your balance and interest payments compare.
- Visual Chart: A bar chart shows the total cost of each loan.
- Free & Private: No registration, no data storage — all calculations are done in your browser.
❓ Refinance Savings Calculator FAQ
What is refinancing?
Refinancing is the process of replacing your existing mortgage with a new one, typically to get a lower interest rate, lower monthly payment, or change the loan term. You pay closing costs to refinance, which are rolled into the new loan or paid upfront.
What is the break-even point?
The break-even point is the number of months it takes for your monthly savings from refinancing to cover the closing costs. If you plan to stay in your home longer than the break-even point, refinancing may be a good decision.
How do I calculate my break-even point?
Break-Even Point = Total Closing Costs ÷ Monthly Savings. For example, if closing costs are $5,000 and you save $100 per month, it will take 50 months (about 4 years) to break even.
What is a good rule of thumb for refinancing?
A common rule is to refinance if you can lower your interest rate by at least 0.5% to 1% and plan to stay in your home for at least 2-3 years. This gives you enough time to recoup the closing costs.
What are typical closing costs for refinancing?
Closing costs typically range from 2% to 5% of the loan amount and include origination fees, appraisal fees, title insurance, and recording fees. This calculator uses a default of $5,000, but you can adjust it.
Should I refinance to a shorter term?
Refinancing to a shorter term (e.g., from 30 to 15 years) will increase your monthly payment but save you significant interest over the life of the loan. This calculator lets you compare different terms.
What is the difference between rate-and-term and cash-out refinance?
A rate-and-term refinance changes your interest rate and/or loan term without changing the loan amount. A cash-out refinance replaces your mortgage with a larger loan, allowing you to take cash out of your home's equity. This calculator focuses on rate-and-term refinancing.
How accurate is this calculator?
This calculator provides accurate estimates based on standard mortgage formulas. However, actual loan terms depend on your credit score, lender requirements, and current market rates. Use this as a planning tool and consult a mortgage lender for a precise quote.
Is this calculator free to use?
Yes, this calculator is completely free to use. No registration or personal data storage is required. All calculations are performed in your browser.
What if I plan to move soon?
If you plan to move within the break-even period, refinancing may not be worth it. This calculator helps you see the break-even point so you can decide if refinancing makes sense for your timeline.