$280k balance, drop from 6.75% to 5.5%
- Savings ≈ $215/mo
- Break-even ≈ 23 months on $5k costs
finance calculator
Refinance Savings Calculator
Compare your current mortgage payment to a potential refi to see monthly savings and break-even time after closing costs.
Results
- Monthly savings
- $215 USD
- Break-even months
- 23.24
How to use this calculator
- Enter remaining balance, current APR, new APR, and months left.
- Enter refinance closing costs.
- We compute current vs new payments, monthly savings, and break-even months.
Inputs explained
- Remaining balance
- Current loan balance you plan to refinance (exclude cash-out).
- Current APR
- Existing mortgage annual rate.
- New APR
- Proposed refinance annual rate.
- Months left
- Remaining term on your current mortgage.
- Refinance closing costs
- Total fees/points you’ll pay to refinance.
How it works
We calculate current and new payments using the remaining balance, APRs, and term.
Monthly savings = old payment − new payment. Break-even = closing costs ÷ monthly savings.
Formula
Payment = balance × [r(1+r)^n]/[(1+r)^n − 1] Monthly savings = old − new Break-even = costs / savings
When to use it
- Testing whether a rate drop justifies refi costs.
- Comparing offers with different rates/closing costs.
- Seeing break-even timing relative to how long you’ll keep the home.
Tips & cautions
- If you plan to move before break-even, a refi may not pencil out.
- Include discount points in closing costs for an accurate break-even.
- Short remaining terms reduce savings; consider recast/extra payments instead of refi if term is low.
- Assumes fixed-rate, fully amortizing payments.
- Does not include PMI changes, escrow differences, or tax impacts.
- Break-even ignores opportunity cost of closing costs; treat as a rough guide.
Worked examples
Only 5 years left
- Short remaining term shrinks savings
- Break-even may exceed your stay horizon
Deep dive
This refinance savings calculator compares current vs new payments and shows monthly savings and break-even months after closing costs. Enter balance, current/new APRs, term left, and refi costs to see if a refi makes sense.
Use it to compare offers and decide if you’ll stay long enough to recoup costs. Points should be added to closing costs for an accurate break-even.
FAQs
- Does this include cash-out amounts?
- No. Enter the balance you plan to refinance excluding cash-out funds.
- What about points?
- Add discount points to the closing cost field since they’re part of refi expenses.
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Rates and closing costs change frequently. Confirm numbers with your lender before refinancing.