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Browse Fiverr →Mortgage Refinance Calculator (break-even + lifetime savings)
Enter your current loan balance, rate, and remaining years on one side, and the new offer's rate, term, and closing costs on the other. The calculator shows the new monthly payment, the cumulative interest you'd save (or lose), and how many months it takes the monthly savings to recover the closing costs.
Current monthly
$1,688
New monthly
$1,461
Monthly change
−$227
Lifetime comparison
- Interest on current loan
- $256,405
- Interest on new loan
- $188,443
- Interest savings
- $67,963
- Net lifetime savings (after closing costs)
- $63,963
Break-even: 18 months (1.5 years) to recover closing costs — strong refinance candidate.
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How it works
When does a refinance make sense?
A refinance makes sense when the lifetime interest savings exceed the closing costs and you intend to stay in the home longer than the break-even period. Conventional advice (the '0.5% to 1% rate-drop rule') is a rough heuristic — the actual answer depends on your remaining loan size and how long you'll keep the home.
Cash-out vs rate-and-term refinance
This calculator handles a rate-and-term refinance: same balance, new rate or term. A cash-out refinance increases the principal (you take cash from your equity), so the monthly payment may not drop even if the rate does. For cash-out, run the new (post-cash-out) balance through this tool against the original balance for a clearer view.
What's not modeled
Property tax, homeowners insurance, and HOA fees stay the same on both sides and are excluded from this comparison. Tax-deductibility of mortgage interest can shift the calculus — consult a tax professional for your specific situation. PMI may be removed if the new loan-to-value ratio drops below 80%.
Frequently asked questions
›Is a 1% rate drop the right rule of thumb?
It's a heuristic, not a rule. On a $500,000 loan, even a 0.5% drop saves enough monthly to clear typical closing costs in under three years. On a $100,000 loan, you may need a 1.5%+ drop to be worth it. Always run the actual numbers.
›How long does it take to break even?
Break-even = closing costs / monthly savings. If closing costs are $4,000 and you save $200/month, it takes 20 months. If you'll move within 20 months, the refi loses money.
›Should I shorten my term during a refinance?
Shortening (e.g. 30-year → 15-year) saves much more in lifetime interest but raises the monthly payment. Lengthening (extending to a fresh 30-year) lowers the monthly but typically increases lifetime interest, even at a lower rate.
›What are typical closing costs?
In the US, expect 2–5% of the loan amount in closing costs (appraisal, origination, title, recording). Some lenders offer 'no-cost' refis where they roll fees into the rate — usually a worse deal long-term.
›Does refinancing reset the loan?
Yes. A new 30-year term means starting over, so most of the early payments go to interest. Use this tool's 'years remaining' field for the current loan to capture how far you've already paid down.
›Should I refinance to remove PMI?
If your home value has risen and your loan-to-value ratio is now below 80%, refinancing can remove PMI even at the same rate. Check whether your current lender will simply drop PMI without a refi first — that's free.
›Are there refinance limits?
No federal limit on how often you can refinance, but some lenders impose a 6-month seasoning period after origination. Each refi triggers a hard credit check and closing costs, so frequent refinancing isn't usually worthwhile.
›Does this work for adjustable-rate (ARM) loans?
Partially. The calculator assumes both loans are fixed-rate. For an ARM, use today's effective rate as the 'current rate' to estimate present-day savings, but remember the ARM's future rate moves can change the picture.
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This tool provides general information and estimates only — it is not financial, investment, tax, or legal advice. Verify important figures with a qualified professional before making decisions.