Using full housing payment
Current payment field should be principal and interest only, not taxes, insurance, or HOA.
Housing calculator
Mortgage Refinance Calculator
Estimate how a new mortgage rate, term, closing costs, and optional cash-out amount could change monthly principal and interest, break-even timing, total cost, and payoff tradeoffs. Use result to compare paths, not to replace lender disclosures.
Estimate refinance impact
Refinance results
New monthly payment—
Monthly payment difference—
Simple break-even—
New loan amount—
New loan total interest—
Estimated lifetime savings—
Current path total cost—
Refinance path total cost—
Scenario comparison
Compare remaining current-loan cost, refinance path cost, and modeled lifetime savings so lower payment does not hide longer term or larger balance.
Current path cost—
New path cost—
Estimated savings—
New loan breakdown
This insight updates to show whether lower payment is coming from lower rate, longer term, financed costs, or cash out.
New principal—
New interest—
New loan amortization preview
Shows first 12 monthly rows for modeled refinance loan. Use it to see whether payment drop comes with slower principal reduction.
| Month | Payment | Principal | Interest | Balance |
|---|
Yearly summary
How refinance math works
Refinance comparison has two layers. First, calculator estimates payment and total interest for new loan using new balance, rate, and term. Second, it compares that new path with cost of keeping current loan. A lower payment is not always cheaper overall. Payment can fall because rate is lower, because term is longer, or because both happen together.
Cash-out and financed closing costs make this even more important. Both raise amount borrowed. So refinance can look easier month to month while still increasing total cost or extending payoff. Good decision requires reading monthly savings next to new balance, total interest, and break-even timing.
Formula
The new payment uses standard fixed-rate amortization formula based on new loan amount, new rate, and new term.
Monthly payment = P × r × (1+r)n / ((1+r)n − 1)
- P = new loan amount
- r = monthly interest rate
- n = number of monthly payments
New loan amount equals current balance plus cash out and, if chosen, financed closing costs. Simple break-even equals closing costs divided by monthly payment savings when savings are positive. Lifetime savings here is simplified comparison, not lender-approved net benefit figure.
Worked example
If balance is $280,000, current payment is $1,850, current rate is 6.75%, and new rate is 5.75%, refinance may lower monthly payment. But if term resets from 25 years remaining to 30 years, some payment drop comes from adding more months, not only from cheaper rate.
Now add $4,500 closing costs. If payment falls by only moderate amount, break-even may take years. If those costs are financed, new balance grows and future interest rises too. That is why same refinance can look attractive on payment screen but weaker on total-cost screen.
What result can and cannot tell you
This page helps compare term reset, closing-cost handling, cash-out effect, and simplified break-even. It cannot tell you approval odds, exact lender fees, cash-to-close details, tax consequences, escrow refunds, appraisal outcome, or whether refinance beats every alternative use of cash.
Use this tool with mortgage extra payment calculator and mortgage payment calculator. Many borrowers should compare “do nothing,” “refinance,” and “keep current loan but pay extra principal” before acting.
Common input mistakes
Ignoring term reset
A lower payment can hide much longer time in debt. Compare years, not only monthly number.
Treating cash out like savings
Cash-out proceeds increase borrowed principal. They are not free gain inside refinance math.
Refinance decision memo
Treat rows on this page like short lender-choice memo. Current-loan row tells you cost of doing nothing. Refinance row shows whether lower rate or lower payment changes path enough to matter. Savings row should never be read alone; it needs break-even timing, total new interest, and debt-duration context beside it.
If refinance lowers payment mostly by restarting long term, relief may be real but savings story may be weak. If refinance lowers rate, keeps term disciplined, and survives closing-cost review, case becomes stronger. This page is strongest when used to separate payment relief from true cost improvement.
Loan Estimate checkpoint
Result quality checklist
- Current payment excludes taxes, insurance, HOA dues, and escrow-only amounts.
- Remaining years come from current statement, not original 30-year headline.
- Closing costs are reviewed both as cash-to-close and financed balance when relevant.
- Cash-out proceeds are treated as added debt, not disguised savings.
- At least one shorter-term and one longer-term refinance case are compared before judging monthly relief.
Questions this calculator cannot settle
This page cannot know your holding period, moving plans, future refinance likelihood, or whether closing costs compete with higher-priority uses of cash. Break-even number is only useful if you expect to stay in loan long enough to reach it.
It also cannot replace lender paperwork. Loan Estimate, cash-to-close details, credits, escrow treatment, appraisal/title charges, and legal terms still control real refinance economics.
Next comparisons to run
Related calculators
Use mortgage payment calculator if you need standard payment mechanics, mortgage extra payment calculator if payoff acceleration may beat refinance, and home affordability calculator if refinance changes budget pressure more than total-cost logic.
For deeper context, read Mortgage Refinance Explained for break-even and term-reset tradeoffs, How Mortgage Payments Work for amortization basics, and Mortgage Extra Payments Explained when refinance competes with principal acceleration.
Method and verification trail
- Method used: Fixed-rate amortization compares current remaining path with refinance path built from remaining balance, cash out, financed closing costs, new APR, and new term.
- Primary source type to verify: Loan Estimate, current mortgage statement, payoff quote, escrow breakdown, and refinance fee worksheet.
- What to confirm in real documents: Remaining term, cash-to-close, lender credits, financed vs paid-outside-closing fees, escrow treatment, prepayment rules, and whether quoted rate requires points or autopay conditions.
- Scope limit: This page does not model taxes, investment opportunity cost of cash, moving timeline, or future refinance options in full detail.
For site-wide methodology, review How We Calculate. For sourcing and corrections standards, review Editorial Policy.
FAQ
Does this include cash-out refinancing?
Yes. Cash-out amount is added to new loan balance, so payment and total cost reflect bigger principal.
What does financing closing costs mean?
Entering 1 adds closing costs to new loan amount. That may reduce upfront cash needed but can increase long-run interest.
Does break-even mean refinancing is automatically worth it?
No. It is only simplified cost-divided-by-savings estimate. Term reset, holding period, and total cost still matter.
Should I refinance or pay extra principal?
Depends on rate gap, costs, term choices, and cash flow. Compare both instead of assuming lower payment wins.
How to read this break-even story
How to read this result
Start with monthly savings, then test whether those savings survive closing costs, financed-balance effects, and term reset. Strong refinance result is not only smaller payment. It is payment change that still makes sense once new debt path and break-even horizon are visible together.
Before acting, compare result with lender disclosures, Loan Estimate details, fee treatment, escrow handling, tax context, and any qualified guidance you use. See How We Calculate and Disclaimer for more context.