Mortgage Refinance Calculator
Find out how much you'll save by refinancing your mortgage. Calculate your break-even point, monthly savings, and total interest reduction. Free refinance calculator.
Reviewed for accuracy by Marcus Webb and the Blueprint Dynamics editorial team (last updated July 2026). Our calculators use primary-source formulas and are cross-checked against IRS publications, Fannie Mae guidelines, and Federal Reserve data. Learn more about our methodology.
Source: Federal Reserve, Freddie Mac, Bankrate national averages. Rates are approximate ranges for borrowers with good credit (700+). Actual rates depend on your credit score, loan-to-value ratio, and lender.
Refinance Calculator
See whether refinancing actually saves you money — and when you break even.
Refinancing saves you $145,653 over the life of the loan
New Monthly Payment
$1,679
Monthly Savings
$421
Break-Even Point
15 mo
Lifetime Savings
$145,653
Break-even is how many months of payment savings it takes to recover your $6,000 in closing costs. Refinancing tends to pay off if you stay in the home past that point.
When does refinancing make sense?
Refinancing replaces your existing mortgage with a new one, typically to lower your interest rate, change the loan term, or tap home equity. The fundamental question is whether your cumulative monthly savings will exceed your closing costs before you plan to sell or move. If your break-even point is 24 months and you plan to stay at least 5 years, refinancing almost certainly makes financial sense.
Closing costs on a refinance typically run 2–5% of the loan balance — for a $300,000 loan, expect $6,000–$15,000 out of pocket or rolled into the new loan. Rolling costs into the loan is convenient but increases your balance and means you pay interest on those costs for the life of the loan.
How much rate reduction justifies a refinance?
There is no universal "you need to drop 1%" rule — the right threshold depends on your loan balance and closing costs. On a $450,000 balance, a 0.5% rate drop saves roughly $135/month and typically breaks even in under 18 months. On a $120,000 balance, a 0.5% drop saves only $36/month and takes years to break even against the same closing costs.
Use this calculator to enter your current loan details and proposed new rate, then compare the break-even period to how long you expect to stay in the home. That comparison — not the rate drop percentage — is the actual decision variable.
Rate-and-term vs. cash-out refinance
A rate-and-term refinance only changes your interest rate and/or loan term. A cash-out refinance lets you borrow more than your current balance and receive the difference in cash — effectively turning home equity into liquid funds. Cash-out refinances carry slightly higher rates and reset your amortization clock, meaning more of your early payments go to interest again. They make sense for high-ROI uses like home improvements or paying off high-interest debt, but not for discretionary spending.
Worked example
Current loan: $320,000 remaining at 7.5%, 24 years left. New loan: $320,000 at 6.75%, 30 years. Monthly savings: ~$160/month. Closing costs: $7,000. Break-even: 44 months (under 4 years). If you plan to stay 7+ years, this refinance saves approximately $8,520 over the remaining horizon — even accounting for restarting a 30-year clock.
The cost of resetting your loan term
Refinancing from year 7 of a 30-year loan into a new 30-year loan restarts your amortization. You'll be paying mostly interest again in the early years of the new loan. If you're already significantly into your loan and plan to stay long-term, refinancing into a 15-year or 20-year term instead may save far more total interest even if the monthly payment is higher.