When should I refinance my mortgage?

The old rule was 'when you can save 1%+ on your rate.' A better rule: when your break-even point (closing costs ÷ monthly savings) is fewer months than you plan to stay in the home. A 0.5% rate reduction with $2,000 closing costs and $150/month savings breaks even in 13 months.

Should I refinance to a shorter term?

Refinancing a 30-year to a 15-year saves enormous total interest — typically $80,000–$120,000 on a $300,000 loan. But payments increase. Do this only if the new 15-year payment is comfortably under 28% of gross income.

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Home & MortgageRefinance

Refinance Savings Calculator — Is Refinancing Worth It?

Calculate your monthly savings, break-even point, and total savings from refinancing your mortgage.

Refinance Savings Details

Current Loan Balance$350,000

Current Rate (%)7.25%

New Rate (%)6.37%

Years Remaining on Loan25

Estimated Closing Costs$6,000

Results

Live

Monthly Savings

$195

Current Monthly Payment$2,530

New Monthly Payment$2,335

Break-Even Period (months)31

Net Savings Over Loan Life$52,485

Current Monthly Payment$2,530

New Monthly Payment$2,335

Monthly Savings$195

How to use

Change one assumption at a time to see what moves the answer most.

Frequently Asked Questions

Everything you need to know.

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Why This Matters

Refinancing saves money only if you stay in the home long enough to recoup closing costs. A $3,000 savings in closing costs with a $150/month payment reduction takes 20 months to break even. This calculator finds your exact number.

How to Use It

1Enter your current loan balance, rate, and remaining term
2Enter the new rate, closing costs, and new term
3See monthly savings and break-even point in months
4See total lifetime savings if you keep the loan full term

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