How does the refinance calculator work?

Enter your current loan balance, interest rate, and remaining term, then enter the new rate and your estimated closing costs. The calculator shows your new monthly payment, the exact month when cumulative savings exceed the closing costs (the break-even point), and the total lifetime saving over the remaining loan term.

What are closing costs and how much should I expect?

Closing costs are one-time fees to complete a refinance: lender origination fees, title search, appraisal, and government recording fees. In the US they typically run 2–5% of the loan amount — $6,000–$15,000 on a $300K loan. Outside the US the structure varies; use your lender's quote or estimate 1–3% if you don't have one yet.

When does refinancing NOT make sense?

Refinancing has upfront costs that take months to recover. It rarely makes sense if: (1) you plan to sell or pay off the loan before the break-even point, (2) the rate reduction is less than 0.5%, or (3) your remaining term is so short that restarting a long mortgage adds more total interest than you save.

How can I reduce the total interest I pay?

Three strategies work: (1) Choose a shorter loan term — it raises the monthly payment but cuts total interest dramatically. (2) Make extra principal payments whenever possible — even small additions each month reduce the final total significantly. (3) Secure a lower rate by improving your credit score, comparing lenders, or refinancing when rates drop.

Is LoanCalc completely free?

Yes, completely free. No account required. No signup. No email collection. No premium features behind a paywall. The calculator, amortization schedule, and payment breakdown chart are all fully accessible at no cost.

Free Refinance Savings Calculator – Break-Even & Monthly Savings

Loan amount

$1,000$2,000,000

Annual interest rate

0.1%30%

Loan term

years

1 yr30 yrs

Typical 30-year US mortgageRates vary by lender and credit score.

Monthly payment

$1,896

30-year fixed mortgage

Principal

$300,000

Total interest

—

over 30 years total

Total cost

—

Payoff year

—

Principal —Interest —

Amortization schedule

Year-by-year breakdown of every payment.

Year	Starting balance	Principal paid	Interest paid	Ending balance

Loan payment formula

M = P × [ r(1+r)ⁿ ] ÷ [ (1+r)ⁿ − 1 ]

MMonthly payment

PPrincipal

rMonthly rate

nTotal payments

Tips

Larger down payment reduces the principal.
Longer term lowers monthly payment but increases total interest.
Lower rate saves significantly over the loan life.

Frequently asked questions about the refinance calculator

Enter your current loan balance, interest rate, and remaining term, then enter the new rate and your estimated closing costs. The calculator shows your new monthly payment, the exact month when cumulative savings exceed the closing costs (the break-even point), and the total lifetime saving over the remaining loan term.
What are closing costs and how much should I expect?
Closing costs are one-time fees to complete a refinance: lender origination fees, title search, appraisal, and government recording fees. In the US they typically run 2–5% of the loan amount — $6,000–$15,000 on a $300K loan. Outside the US the structure varies; use your lender's quote or estimate 1–3% if you don't have one yet. The more accurate your closing cost figure, the more accurate your break-even result.
Refinancing has upfront costs that take months to recover. It rarely makes sense if: (1) you plan to sell or pay off the loan before the break-even point, (2) the rate reduction is less than 0.5%, or (3) your remaining term is so short that restarting a long mortgage adds more total interest than you save. If your break-even is longer than your planned stay in the loan, skip the refinance.
Three strategies work: (1) Choose a shorter loan term — it raises the monthly payment but cuts total interest dramatically. (2) Make extra principal payments whenever possible — even small additions each month reduce the final total significantly. (3) Secure a lower rate by improving your credit score, comparing lenders, or refinancing when rates drop.
Yes, completely free. No account required. No signup. No email collection. No premium features behind a paywall. The calculator, amortization schedule, and payment breakdown chart are all fully accessible at no cost. LoanCalc is supported by display advertising: the calculator itself will always remain free.

Compound interest & savings growth calculator

See exactly how your savings or investment grows year by year with compound interest.

Initial deposit

$100$1,000,000

Monthly contribution

$0$10,000/mo

Annual return rate

0.1%30%

Investment period

years

1 yr50 yrs

S&P 500 historical average~7% annually after inflation over the long term.

Future value

—

Total portfolio after 20 years

Total deposited

—

Interest earned

—

Growth multiple

—

Target year

—

Deposits —Growth —

Year-by-year growth

Refinance calculator: how much will you save?

Enter your current loan details and the new rate you've been offered. The refinance calculator shows your monthly savings, the break-even month, and your total lifetime saving after closing costs.

Current loan

Remaining balance

$1,000$2,000,000

Current interest rate

0.5%20%

Years remaining

years

1 yr30 yrs

New loan offer

New interest rate

0.5%20%

Closing costs

$0$20,000

US typical range: 2–5% of the loan amount. Outside the US, use your lender's quote or estimate 1–3%.

Monthly savings

—

Per month with the new rate

Old payment

—

New payment

—

Break-even

—

Total lifetime savings

—

Enter your loan details to see if refinancing makes sense.

Break-even is the month when cumulative savings from the lower rate exceed your upfront closing costs.

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Refinancing Your Mortgage: When It Makes Sense

When refinancing makes financial sense

Refinancing replaces your existing loan with a new one, ideally at a lower interest rate. The decision comes down to one fundamental question: will the long-term savings exceed the upfront costs, and will you stay in the loan long enough to recoup those costs? Refinancing makes the most sense when:

Your new rate is at least 0.5–1% lower than your current rate
You plan to remain in the home longer than the break-even period
Your credit score has improved significantly since your original loan
You want to switch from an adjustable-rate to a fixed-rate mortgage for stability
You want to shorten your loan term (e.g., from 30-year to 15-year) and can afford higher monthly payments

How to calculate the break-even point

The break-even calculation is simple: divide your total closing costs by your monthly savings.

Break-even months = Closing costs ÷ Monthly payment savings

Example: If refinancing costs $4,500 in closing costs and saves you $200 per month, the break-even is 4,500 ÷ 200 = 22.5 months — approximately 2 years. If you plan to stay in your home for at least another 3–5 years, this refinance makes clear financial sense. If you're planning to move within 18 months, it doesn't.

Cash-out refinance vs rate-and-term refinance

There are two main types of mortgage refinancing:

Rate-and-term refinance: You replace your existing mortgage with a new one at a better rate and/or different term, without changing the loan balance. This is the most common type and what this calculator models. The goal is purely to reduce your interest cost.
Cash-out refinance: You borrow more than your current loan balance, receiving the difference as cash. For example, if your home is worth $400,000 and you owe $250,000, you might refinance for $320,000 and take $70,000 in cash for home improvements, debt consolidation, or other purposes. Cash-out refinancing resets your equity and typically carries a slightly higher rate than rate-and-term refinancing.

Hidden costs of refinancing

The true cost of refinancing extends beyond the stated closing costs. Common fees include:

Origination fee: 0.5–1% of the loan amount. The lender's fee for processing the new loan.
Appraisal fee: $300–$600. Most lenders require a fresh appraisal to confirm your home's current value.
Title insurance: $500–$1,500. Required to protect the lender against title disputes.
Recording fees: $25–$250. Government fees to record the new mortgage.
Discount points: Optional prepaid interest to "buy down" your rate. One point = 1% of loan amount = typically 0.25% rate reduction.

Total closing costs for a typical refinance run 2–3% of the loan amount. On a $300,000 loan, expect $6,000–$9,000 in costs unless you choose a "no-closing-cost" refinance (where costs are rolled into the rate instead).

When NOT to refinance

You're moving soon: If you'll sell the home before reaching the break-even point, refinancing costs more than it saves.
Prepayment penalties: Some loans charge fees for paying off early. Verify your current loan terms before refinancing.
You've paid off most of the loan: Resetting to a new 30-year term on a loan you're 20 years into extends your debt significantly, even if the rate is lower.
Your credit score has dropped: If your credit has worsened since your original mortgage, you may not qualify for a better rate and could actually receive a higher rate.

Also see: Mortgage Calculator — model your original mortgage or compare loan options before deciding to refinance.