Refinancing can lower your monthly payment, reduce your interest rate, or help you pay off your loan faster — but it's not always the right move. This calculator shows your break-even point and total savings so you can make a data-driven decision in under a minute.
How to Use This Refinance Calculator
Enter your current loan balance, current interest rate, and current monthly payment. Then enter the new rate you've been offered, the new loan term, and estimated closing costs (typically 2–5% of the loan balance). The calculator will show you exactly how long it takes to break even and how much you'll save — or lose — over time.
What Is the Break-Even Point?
The break-even point is how many months it takes for your monthly savings to cover the cost of refinancing. For example, if refinancing costs $4,000 in closing costs and saves you $200/month, your break-even is 20 months.
General rule: If you plan to stay in the home past the break-even point, refinancing likely makes sense. If you might sell or move before then, it probably doesn't.
When Does Refinancing Make Sense?
Refinancing tends to make financial sense when:
- Your new rate is at least 0.75%–1% lower than your current rate
- You plan to stay in the home for at least 3–5 more years
- Your break-even point is under 36 months
- You want to switch from an ARM (adjustable-rate mortgage) to a fixed rate
Refinance Closing Costs — What to Expect
Closing costs typically include appraisal fees, title insurance, origination fees, and prepaid interest. On a $300,000 loan, expect to pay $6,000–$15,000 in closing costs. Some lenders offer "no-closing-cost" refinances — but those costs are either rolled into the loan balance or reflected in a slightly higher rate.
Frequently Asked Questions
Can I refinance with bad credit?
You typically need a credit score of 620+ for conventional refinancing. However, programs like FHA Streamline Refinance or VA IRRRL may have more lenient requirements.
Does refinancing restart my loan?
If you refinance into a new 30-year loan, yes — your amortization clock resets. Consider a 15-year or 20-year term to keep your payoff date on track or accelerate it.
How often can I refinance?
Most lenders require a waiting period (often called seasoning) of at least 6 months between refinancing conventional mortgages.
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