Free Refinance Calculator - See If Refinancing Makes Sense
See if refinancing your mortgage makes sense.
Formula & Methodology
The Mortgage Refinance Calculator computes the new monthly payment on a refinanced loan using the same amortization formula as a mortgage, then compares it to your current payment to find the monthly savings. It divides your closing costs by those savings to show how many months it takes to break even on the refinance.
- New Payment = P × [r(1 + r)ⁿ] / [(1 + r)ⁿ − 1]
- Break-Even Months = Closing Costs / Monthly Savings
Worked Example
Using the Mortgage Refinance Calculator: apply the formula above to your input values. For instance, New Payment = P × [r(1 + r)ⁿ] / [(1 + r)ⁿ − 1], then Break-Even Months = Closing Costs / Monthly Savings. The tool performs each step instantly and shows the result.
Frequently Asked Questions
When does refinancing make sense?
When the interest saved outweighs closing costs before you sell or move, based on your break-even point.
What is the break-even point on a refinance?
It is how long it takes for monthly savings to recover the closing costs; past that point you come out ahead.
Does refinancing reset my loan term?
Usually yes, which can lower payments but extend how long you pay, so compare total interest carefully.