Refinance Calculator – Estimate Payments and Savings
See whether refinancing your mortgage lowers your payment enough to justify the costs.
About the Refinance Calculator
What is the Refinance Calculator?
A refinance calculator compares your current mortgage payment with a new one and works out how long it takes to recover the closing costs.
Why use this calculator?
Refinancing to a lower rate can cut payments and total interest, but fees mean it only pays off if you stay past the break-even point.
How to use it
- Enter your current balance, rate and remaining term.
- Enter the new rate and term you are offered.
- Enter the closing costs of refinancing.
- Check the monthly savings and the break-even time.
Formula
Break-even months = closing costs ÷ monthly savings
Extending the term lowers the payment but may raise lifetime interest. Weigh the monthly saving against the total cost.
Frequently Asked Questions
Should I refinance if I plan to move soon?
Probably not. If you sell before the break-even point, the closing costs outweigh the savings. Estimate how long you will stay first.
What is a no-closing-cost refinance?
The lender covers the fees in exchange for a slightly higher rate. Your monthly saving is smaller but you start ahead immediately.
What is included in a monthly mortgage payment?
Most payments combine principal, interest, property taxes and homeowners insurance (often called PITI). Some loans also include private mortgage insurance (PMI).
What is PMI and when can I drop it?
Private mortgage insurance is usually required when your down payment is under 20%. You can typically request removal once you reach 20% equity.
Fixed versus adjustable rate — which is better?
A fixed rate keeps the same interest rate for the whole term, giving predictable payments. An adjustable rate starts lower but can rise after the initial period.
How much house can I afford?
A common guideline is that housing costs stay below 28% of gross monthly income and total debt below 36%, though lenders and budgets vary.
What is the difference between pre-qualification and pre-approval?
Pre-qualification is a quick estimate based on self-reported data. Pre-approval is a verified commitment after a lender reviews your finances.
What is the difference between principal and interest?
The principal is the amount you borrow. Interest is the fee charged for borrowing it, shown either as an annual rate (APR) or a periodic rate. Early payments go mostly toward interest; later payments go mostly toward principal.
How does the loan term affect my payment?
A longer term lowers the monthly payment but increases the total interest you pay over the life of the loan. A shorter term raises the monthly payment but costs less overall.
What is an amortization schedule?
It is a table that breaks every payment into its principal and interest portions and shows the remaining balance after each payment.