Should I Refinance Calculator

Refinancing means replacing your current loan with a new one, usually to get a lower interest rate, a shorter term, or a smaller monthly payment. This calculator compares your current monthly payment to what you'd pay under the new rate and term, then shows how many months it would take for the monthly savings to cover the cost of refinancing in the first place.

That cost is the closing costs, and they're often overlooked when people focus purely on the interest rate. Typical refinance closing costs run 2% to 5% of the loan amount and usually include an origination fee (what the lender charges to process the loan), an appraisal fee (confirming the home's current value), title insurance (protecting against ownership disputes), recording fees (filing the new loan with your local government), and a credit report fee. If you don't have an exact quote yet, this calculator estimates closing costs at 2% of your new loan balance as a reasonable starting point, and you can overwrite that number the moment you get a real quote from a lender.

The break-even point is where the math gets useful: divide your total closing costs by your monthly savings, and you get the number of months before refinancing actually starts saving you money. If you plan to stay in the home well past that point, refinancing is usually worth it. If you might sell or move before then, the closing costs could easily outweigh the savings.

One thing this calculator doesn't account for is resetting your amortization clock. If you're several years into a 30-year mortgage and refinance into a new 30-year loan, you're extending how long you'll be paying, even if the monthly payment drops — worth keeping in mind alongside the pure break-even math.