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Refinance Calculator illustration

Refinance Calculator

Compare a fixed-rate mortgage refinance with your current payment, including closing costs, break-even timing, five-year cost, and lifetime savings.

FinancialWorks without JavaScriptReviewed 2026-08-16

Inputs

Your numbers

Enter unpaid principal, not a payoff quote. The lender payoff can also include accrued interest and other amounts, so the actual new loan amount may differ.

Nominal annual interest rate on the existing fixed-rate loan—not APR.

Use only principal and interest from the current statement. The model assumes this fixed payment continues to payoff; exclude escrow, mortgage insurance, and current interest-only or contractual balloon structures.

Fixed nominal annual rate for the proposed refinance—not APR.

Proposed loan term

Enter net lender and third-party transaction charges after lender credits. Exclude prepaid interest and initial escrow deposits; the comparison counts these costs once.

Financing raises the new principal and adds interest; cash-paid costs still count in break-even and net savings.

Use the date immediately before the first modeled monthly interval; payment 1 is one month later.

Try an example

Result

Enter your values and press Calculate to see the result here.

Formula verified against 12 CFR § 1026.37 — Content of disclosures for certain mortgage transactions from Consumer Financial Protection Bureau. Last checked 2026-08-16.

Built and maintained by Eddy Bo, founder of CalcVerdict.

How does this calculator work?

A refinance is not a lower rate, it is a trade: you pay closing costs today to buy a cheaper payment tomorrow. The whole question is how long the cheaper payment takes to repay the costs, and whether you will still own the loan by then. This tool answers that by building two complete schedules side by side and comparing them. Your current loan is modelled from the payment you actually make, not from a payment reconstructed out of its original terms. That matters: if you have ever recast, been modified, or made curtailments, the original terms no longer describe your loan. The tool takes your balance and note rate, charges one month of interest at balance x rate / 1200, subtracts that from your payment, applies the remainder to principal, and repeats until the balance is gone. Whatever number of months that takes is your real remaining term. The proposed loan is built the other way, from the standard level-payment relation in Regulation Z Appendix J, over the term you choose in whole months, from a floor of 3 up to a ceiling of 480. Break-even is closing costs divided by the monthly saving, rounded up to a whole month. If the new payment is not lower, there is no break-even month and the tool says so rather than inventing one. There is one deliberate refusal built in: if the break-even month lands at or beyond the month your current loan would have paid off, the figure is suppressed, because the final payment of any loan is trimmed below the scheduled amount and a division by the level payment stops describing reality there. Here is the part that catches people, and it is why the CFPB refinance worksheet asks you to look past the monthly payment. A lower payment is not the same as a lower cost. Refinancing a loan with 22 years left into a fresh 30-year term drops the payment sharply and can still cost you tens of thousands more in total interest, because you have reset the clock and pushed the front-loaded interest years back to the beginning. That is why this calculator reports three separate verdicts: the monthly saving, the five-year net saving (interest paid over 60 months, with closing costs charged to the new loan), and the lifetime net saving, which is current total interest minus new total interest minus closing costs. Those three can point in different directions on the same refinance, and the honest answer depends on how long you plan to stay. Financing the closing costs rather than paying cash simply adds them to the new principal, so you borrow more and pay interest on the fee for the life of the loan. That option makes the break-even month look instant while quietly worsening the lifetime figure. The tool also refuses any proposed loan whose final payment exceeds twice the scheduled payment, which is the balloon threshold in 12 CFR 1026.37(b)(5) — a term that short is not a refinance, it is a balloon. The payment figures compared here are principal and interest only. Your escrow for taxes and insurance follows the property, not the loan, so it is unchanged by a refinance; add it back with the mortgage calculator if you want the full monthly figure. And if the aim is simply to be rid of the loan sooner, compare the refinance against the do-nothing option of sending extra principal on the mortgage payoff calculator, which costs no closing costs at all.

What questions do people ask about this calculator?

How is the refinance break-even point calculated?

The simple fee-recovery point is closing costs divided by positive monthly P&I savings, rounded up to a whole month. It is omitted when the proposed payment is not lower or when recovery would occur in or after the current loan’s modeled payoff month. This shortcut does not compare equity, balances, taxes, investment returns or the timing of financed costs.

What changes when refinance closing costs are financed?

Financed costs are added to the proposed principal, so the new payment and interest both rise. The calculator still subtracts the closing-cost amount once in lifetime and five-year net savings: the larger new balance represents repayment of that cost, while the new interest total captures only the added financing charge. It does not subtract the fee twice.

Does a lower monthly payment mean refinancing saves money?

No. A new 30-year term can reduce the payment simply by spreading the balance over more months, even when total interest and closing costs are higher. Compare the payoff dates, five-year interest-and-fee cost, remaining balances and lifetime net savings—not only the payment or simple break-even.

Why enter my actual current principal-and-interest payment?

The current balance and actual P&I payment define the remaining loan path. Reconstructing a payment from an original term can be wrong after extra principal, a recast or a modification. Use the P&I amount on the current statement and exclude escrow, taxes, homeowners insurance and mortgage insurance. The model assumes that fixed payment continues until payoff, so the current-loan path is not for an interest-only or contractual balloon structure.

What does the five-year refinance comparison include?

It compares interest in the first 60 modeled payments and adds the full refinance closing costs to the proposed side. It also shows each balance after 60 payments. This is a focused interest-and-fee comparison, not the official Loan Estimate “In 5 years” disclosure, which uses its own prescribed cash-flow fields.

Does the refinance estimate include taxes, escrow or mortgage insurance?

No. Both payments are principal and interest only. The comparison excludes property tax, homeowners insurance, mortgage insurance, escrow adjustments, tax deductions, appraisal differences, prepayment penalties and any delayed or skipped first payment. Add those separately when evaluating an actual offer.

Is a no-cost refinance really free?

Usually not. CFPB explains that a lender can cover upfront costs by charging a higher interest rate or adding costs to the loan balance. Compare the rate, amount financed, lender credits and total costs on Loan Estimates. Enter any costs added to principal as financed closing costs here rather than treating them as zero.

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