Mortgage refinance calculator

Reembun. (2026, July 31). Mortgage refinance calculator. https://reembun.com/refinance-calculator

What refinancing actually changes

A refinance replaces one loan with another. The new lender pays off your existing balance, and you start again with a new rate, a new term and a new set of fees.

Three things move at once, which is why the decision is so often made on the wrong number:

1. The rate, which is the only genuine saving.
2. The term, which changes the payment without changing what the money costs.
3. The fees, paid today for a benefit that arrives a little at a time.

Lender calculators show the first, quietly assume the second, and mention the third in a footnote. The break-even folds all three into one figure.

The break-even

Break-even (months) = total closing costs ÷ monthly saving

Past that month, refinancing was worth doing. Before it, you paid to save less than you paid. Everything else (the lower payment, the rate difference, the lifetime interest chart) is downstream of that one comparison.

A worked example

You owe $320,000 at 7.25% with 26 years left. A lender offers 5.9% over 30 years, with $6,400 in closing costs:

• Payment now: $2,281.74
• Payment after refinancing: $1,898.04
• Monthly saving: $383.70
• Break-even: 17 months
• Interest still to pay as you are: $391,902
• Interest on the new loan: $363,293
• Lifetime saving: $22,209

Seventeen months is a comfortable break-even. If you expect to stay in the house another five years, this refinance is clearly worth doing.

The term reset is where the money goes

That example took 26 remaining years and stretched them back to 30. Run the same 5.9% over the 26 years you actually had left:

• Payment: $2,008.04, which is $110 a month more than the 30-year version
• Break-even: 24 months
• Interest on the new loan: $306,509
• Lifetime saving: $78,993

Keeping your payoff date saves $56,784 more than resetting it, for $110 a month. The 30-year option feels better in monthly terms and costs more than three times as much in total, because four extra years of interest are hiding inside the smaller payment.

This is the single most useful comparison in a refinance, and it is almost never shown. The calculator above runs it automatically whenever the new term is longer than the time you have left.

What the closing costs are

Cost	Typical size	Notes
Origination / lender fee	0.5-1% of the loan	Sometimes waived, usually priced into the rate instead
Appraisal	$400-$700	Occasionally waived on low loan-to-value refinances
Title search & lender’s title insurance	$700-$2,000	Ask about a reissue rate, since many states discount it
Credit report, flood cert, recording	$100-$500	Small, fixed, unavoidable
Prepaid interest	Days between closing and the first payment	Real, but it replaces interest you would have paid anyway
Escrow deposit	2-6 months of tax and insurance	Not a cost: your old escrow balance is refunded

Two of those lines routinely distort a break-even calculation. The escrow deposit is not a fee, so including it overstates the cost. Points are, so leaving them out understates it.

Rolling the costs in

Financing the fees removes the cash outlay but not the cost. In the example above, rolling $6,400 into a 30-year loan at 5.9% costs about $7,300 in interest, more than the fee itself. The lifetime saving falls from $22,209 to $14,943.

That can still be the right decision if the cash is doing better work elsewhere. What it must not do is make the fee look free, which is why the break-even here always counts the full amount whether it was paid or financed.

When not to refinance

• You will move before the break-even. The most common expensive mistake.
• You are far into the term. Late payments are mostly principal, so a lower rate has little left to work on.
• The saving comes only from a longer term. Compare against the same-term figure before deciding.
• You would drop below 20% equity by taking cash out. That reintroduces mortgage insurance and can wipe out the gain.
• Your credit has worsened since the original loan. The advertised rate is for the best profile; your actual quote may not beat what you already have.

What this calculator does not know

It assumes a fixed rate for the whole term, so an adjustable-rate offer will diverge after its first reset. It also excludes property tax, insurance and any mortgage insurance, since those follow the house rather than the loan and are usually unchanged by refinancing. The exception is a refinance that removes PMI, which is worth counting as an extra monthly saving.

It cannot know whether your lender charges a prepayment penalty (rare on US mortgages, common elsewhere), how points are priced on your quote, or what a lender will actually approve. Get a Loan Estimate from at least three lenders before committing: the form is standardized, so the numbers compare directly in a way advertised rates never do.