Refinance Calculator FAQ

It compares your current mortgage to a new one and shows your monthly savings, the closing costs, and the break-even point where refinancing starts paying off.

The Complete Guide

Refinancing replaces your current loan with a new one, usually to lower the rate, shorten the term, or change the loan type. The decision hinges on one number: the break-even point where accumulated savings finally cover the closing costs.

A common rule of thumb is to refinance when you can drop your rate by at least 0.5% to 0.75% and you will stay past break-even. But rules of thumb are no substitute for running your own numbers, which is what this tool does.

Watch the term reset. Lowering your payment by stretching the loan back to 30 years can cost more interest over time even at a lower rate. If your goal is to pay less interest overall, model a shorter term alongside the lower rate.

How the Calculator Works

The calculator computes your new payment at the proposed rate and term, subtracts it from your current payment to find monthly savings, then divides closing costs by those savings to find how many months it takes to break even.