Should you refinance your mortgage?
Refinancing replaces your current mortgage with a new one, usually to get a lower rate or change the term. The catch is closing costs, so the key question is the break-even point — how many months of savings it takes to recover those upfront costs. If you will keep the home well past break-even, refinancing usually makes sense; if you might move sooner, it may not.
What this calculator shows
Enter your remaining balance, current rate and years left, then the new rate, term and closing costs. You will see the new monthly payment, your monthly saving, the break-even month, and the total interest and lifetime cost of each loan side by side.
Watch the term: refinancing a loan with 25 years left into a fresh 30-year term can lower the monthly payment while actually increasing total interest. Matching or shortening the term captures more of the benefit of a lower rate.
Frequently asked questions
What is the refinance break-even point?
It is the number of months of payment savings needed to cover your closing costs — closing costs divided by monthly savings. If you plan to stay in the home longer than the break-even period, refinancing typically pays off; if not, the upfront costs may outweigh the savings.
Does a lower payment always mean a better deal?
No. Stretching the loan back out to a longer term lowers the monthly payment but can raise the total interest you pay over time. Compare the lifetime figures, not just the monthly payment, and keep the term as short as you can comfortably afford.
Should I roll closing costs into the loan?
You can, which avoids paying cash upfront, but it increases your balance and the interest you pay on it. This calculator treats closing costs as paid upfront; if you finance them, your real savings will be a little lower.