Calculator
Refinance Calculator
Compare your current loan to a new rate, and see how long it takes closing costs to pay for themselves.
Is refinancing worth it?
Refinancing replaces your current loan with a new one, usually to get a lower rate, a shorter term, or both — but it isn’t free. Closing costs on the new loan need to be paid back through monthly savings before refinancing is actually ahead, which is what the break-even estimate below tells you.
Frequently asked questions
How is the break-even point calculated?
Break-even = closing costs ÷ monthly savings. If refinancing saves you $150/month and costs $6,000 in closing costs, it takes 40 months (about 3.3 years) of staying in the loan before the new rate has actually paid for itself.
What if my new payment is higher than my current one?
That can still make sense if you're shortening the term (say, 30 years down to 15) rather than chasing a lower payment — you'd pay more per month but far less total interest over the life of the loan. This calculator's savings and break-even numbers assume you're looking for a lower payment; a higher new payment means there's no monthly savings to break even on.
Does this include the closing costs being rolled into the loan?
No — the closing costs entered here are treated as paid upfront, separate from the loan balance, which is the standard way to calculate a clean break-even point. If you roll costs into the new loan instead, you'll pay interest on them too, so the true break-even takes slightly longer than this estimate.
When does refinancing typically make sense?
As a rule of thumb, a rate drop of at least 0.5-1 percentage point is often needed to justify closing costs, and it matters how long you plan to stay in the home — if you'll move before the break-even point, refinancing usually isn't worth it even with real monthly savings.