Refinance Calculator
Compare current and refinance loan payments, closing costs, break-even months, and lifetime savings. Fast client-side planning tool.
By Utilix Editorial Team · Added May 4, 2026 · Updated Sep 6, 2026
Scenario A
Input
Result
Enter a value for current loan balance to see your result.
How it works
Compares an existing loan with a refinanced loan to estimate monthly savings, break-even time, and lifetime savings after closing costs.
Formula
Monthly Payment = Balance × r / (1 − (1 + r)^(−n)) Monthly Savings = Current Payment − New Payment Break-even = Closing Costs ÷ Monthly Savings
- r
- Monthly interest rate (annual rate ÷ 12 ÷ 100)
- n
- Remaining monthly payments (years × 12)
Step by step
- 01Calculate the current monthly payment from the remaining balance, current rate, and remaining term.
- 02Calculate the new monthly payment from the refinance rate and new term.
- 03Subtract the new payment from the current payment to estimate monthly cash-flow savings.
- 04Divide closing costs by monthly savings to estimate the break-even month.
Examples
$240,000 from 7% to 6%
The refinance saves about $157 per month, so $5,000 of costs break even in roughly 32 months.
Inputs
- Current loan balance:
- 240000
- Current annual rate:
- 7
- Years remaining:
- 25
- New annual rate:
- 6
- New loan term:
- 25
- Closing costs:
- 5000
Result
- Monthly savings:
- 157.09
- Break-even months:
- 32
More about this tool
Refinancing replaces your current loan with a new one — usually at a different rate, term, or both. This calculator compares the two side by side:
Current Payment = Balance × r_old / (1 − (1 + r_old)^(−n_old))
New Payment = Balance × r_new / (1 − (1 + r_new)^(−n_new))
Break-even Months = Closing Costs ÷ Monthly Savings
Lifetime Savings = (Old Payment × n_old) − (New Payment × n_new) − Closing Costs
The Break-Even Trap
A refinance that lowers your monthly payment feels like a clear win, but it isn't automatically one. If the new loan resets your term back to a longer period — say, refinancing from year 5 of a 30-year mortgage into a fresh 30-year term — you restart the interest-heavy early years of amortization. The monthly payment may drop, but total interest paid over the life of the loan can actually increase. This calculator's "lifetime savings after costs" figure accounts for that; a positive number means the refinance genuinely saves money over the full comparison period, not just month-to-month.
When Refinancing Usually Makes Sense
- Your new rate is meaningfully lower (commonly cited threshold: 0.5-1 percentage point) than your current rate
- You plan to stay in the property (or keep the loan) longer than the break-even period
- You're not extending the term significantly beyond your original payoff date
- Closing costs are reasonable relative to your remaining balance
No-Closing-Cost Refinances
Some lenders offer to waive upfront closing costs in exchange for a slightly higher interest rate. This isn't free — you're paying the same costs, just folded into the rate over time instead of upfront. Model the higher "no-cost" rate in the new rate field to compare it fairly against a traditional refinance with the same lender's lower "buy the rate down" option.
Use the Mortgage Calculator to model your original loan in more detail, or the Amortization Schedule to see a full month-by-month breakdown of either option.
Frequently asked questions
What is refinance break even?
It is the number of months needed for monthly payment savings to recover closing costs.
Can lifetime savings be negative?
Yes. A refinance can lower the monthly payment while increasing total paid if the new term is much longer.
How much should I expect to pay in closing costs?
Refinance closing costs typically run 2-6% of the loan balance, covering appraisal, origination, title, and recording fees. Some lenders offer a 'no-closing-cost' refinance that rolls these fees into a slightly higher rate instead — model that higher rate here to compare fairly against paying costs upfront.
Does resetting my loan term back to 30 years hurt me even at a lower rate?
It can. Restarting a fresh 30-year term after you've already paid down several years resets you back to the interest-heavy start of amortization, which can increase total interest paid even at a lower rate. Compare the 'lifetime savings after costs' figure, not just the monthly payment, to see the full picture.
Is it worth refinancing if I plan to move in a few years?
Only if you'll stay past the break-even month shown above. If you expect to sell or move before then, the closing costs likely won't be recovered in monthly savings.