Refinance Calculator
Enter what you still owe, your current rate and the months left, then the new rate, the new term and the closing costs. Enter the costs as one total, as a percent of the balance or line by line from a Loan Estimate, and choose whether they go on the new loan or get paid in cash. The calculator shows both monthly payments, the monthly saving, the months until that saving covers the closing costs, the total interest on each loan and the total saving after closing costs. It also says how the figures read on two rules of thumb, and it does not tell you whether to refinance.
How to use the Refinance Calculator
- Enter your numbers in the Refinance Calculator above.
- Press the Calculate button to see the result.
- To try other numbers, change any value and press the button again.
The refinance break-even math
Monthly saving = current payment − new payment · · · Break-even months = closing costs ÷ monthly saving · · · Total saving = current interest − new interest − closing costs · · · Closing costs = loan costs + other costs − lender credits
The new loan is your balance, plus the closing costs if they go on the loan. Both payments come from the fixed-rate payment formula, rounded to the cent, and each total interest figure comes from paying that loan down to zero in whole cents. Break-even rounds up to a whole month and shows Never when the new payment is not lower. A lower payment is not always a saving. Take the numbers the calculator opens with: $250,000 at 7.5% with 300 months left, refinanced at 6.5% over 360 months with $5,000 of closing costs. You save $235.71 a month and break even after 22 months, but Total Savings shows -$25,998.87, because the new loan runs five years longer.
Worked example
A $300,000 mortgage at 7.25% with 336 payments left, 28 years, costs $2,088.47 a month. Refinance it at 6.25% over the same 336 months and add $7,000 of closing costs to the new loan. The payment drops to $1,937.11, which saves $151.36 a month. The savings cover the closing costs after 47 months, almost 4 years. Interest falls from $401,726.86 to $343,868.92, so Total Savings is $50,857.94 once the $7,000 is paid back. Pay the $7,000 in cash instead: the new payment is $1,892.94, you save $195.53 a month, break-even comes after 36 months and Total Savings is $58,698.27. The $7,000 could also come from a Loan Estimate: $2,000 of origination charges, $900 and $1,800 for the two kinds of services, $400 of taxes and government fees, $1,500 of prepaids and $1,200 of escrow come to $7,800, and $800 of lender credits brings it to $7,000.
Frequently asked questions
What is the 1% refinance rule?
A saying: refinance when the new rate is at least 1 percentage point below yours. It looks at the rates and leaves out the closing costs and how long you stay. The Federal Reserve's refinancing guide does not state it, and a search of the CFPB's toolkit for it found nothing. That guide (last updated August 27, 2008) works from closing costs and monthly savings. The CFPB's Your Home Loan Toolkit (print edition, opened November 3, 2026) gives a different rule of thumb, to break even in about two years. In the example on this page a drop of 1 point with $7,000 of closing costs meets the 1% rule and breaks even after 47 months, so the two rules disagree. The calculator shows both and leaves the decision to you, because it does not know how long you will keep the loan.
How much are closing costs on a refinance?
Your Loan Estimate has your real figure, so use it once you have one. Before that, the Federal Reserve's guide says it is not unusual to pay 3 percent to 6 percent of the outstanding principal in refinancing fees, which is $9,000 to $18,000 on $300,000. That guide was last updated on August 27, 2008, so treat the range as old. The CFPB's toolkit says refinancing costs can be about the same as the closing costs on your original loan.
Which lines of a Loan Estimate do I enter?
The subtotals named in the form, which Regulation Z sets out in 12 CFR 1026.37(f) and (g) (eCFR text up to date as of October 30, 2026). Total Closing Costs there is loan costs plus other costs minus lender credits, and the calculator adds them up the same way. That total includes prepaids and the escrow payment, which are not lender fees. Leave those at 0 if you want to compare fees alone.
Should I refinance into a 30-year or a shorter term?
Enter each term and compare. Take the $300,000 at 7.25% with 336 months left from the example. At 6.25% over 360 months the payment falls to $1,890.25 and Total Savings is $21,234.93. Over 180 months the payment rises to $2,632.29, so break-even shows Never, yet Total Savings is $227,915.20, because the shorter loan charges far less interest.
How does the calculator treat closing costs?
You choose. Added to the new loan, they raise the new payment and you pay interest on them. Paid in cash at closing, the new loan is your balance alone. Total Savings subtracts them either way, so it shows what is left after paying them back. It does not count what the cash could have earned elsewhere.