How to use the Refinance Calculator
Start with Remaining balance ($), Current annual rate (%), and Remaining term (years), then enter the proposed loan's rate, term, and costs. The result separates principal-and-interest changes from shared taxes and insurance, and shows cash needed at closing, fee recovery, and holding-period totals.
Compare a mortgage refinance step by step
- Enter Remaining balance ($), Current annual rate (%), and Remaining term (years). Leave Current monthly P&I ($, optional) blank to calculate that payment, or enter the current principal-and-interest payment.
- Enter New annual rate (%) and New loan term (years) for the proposed refinance.
- Enter Closing costs ($), Points (optional), and Cash-out amount ($, optional). Select Roll closing costs & points into the new loan when those fees should be added to the new balance.
- Enter Monthly property taxes ($, optional), Monthly homeowners insurance ($, optional), and Planned holding period (years, optional) when they belong in the comparison.
- Click Calculate to display the comparison. Click Reset to clear the fields and result.
How payments, points, and break-even are calculated
The calculator uses a fixed-rate payment formula. It divides each annual rate by 100 and then by 12 for the monthly rate. Points use the current balance plus Cash-out amount ($, optional) as their base before rolled-in fees are added. Monthly property taxes and Monthly homeowners insurance go into both full payments, so they affect PITI without changing the principal-and-interest difference.
Inputs: $320,000, 6.75%, 27 years
New loan: 5.75%, 30 years, $5,000 closing costs, 1 point
Output: current P&I $2,149.12; new P&I $1,867.43
Payment savings $281.69; cash to close $8,200.00; break-even 30 monthsThe break-even month divides closing costs plus points by monthly principal-and-interest savings. The fee total remains in that calculation when Roll closing costs & points into the new loan is selected. The result omits the month when the new payment is not lower. With zero fees, lower payments count as savings from month one.
What the refinance comparison leaves out
Holding-period totals use the payments and fees entered in the form. The calculation does not add separate payoff-balance, home-equity, escrow, or tax analysis. The annual schedule shows end-of-year balances and cumulative interest, with a decimal holding period marked at its rounded whole year.
- Blank taxes and insurance fields count as $0.
- Rolling costs into the new loan adds fees to the new balance. The fee portion of cash to close becomes $0, while Cash-out amount ($, optional) can produce cash received at closing.
- The calculator does not model adjustable rates, PMI, lender credits, escrow refunds, appraisal outcomes, or qualification requirements.
- Remaining balance must be greater than $0. Rates accept 0 through 100. Terms must be greater than 0 and no more than 100 years. Points accept 0 through 10. An entered current payment must cover the first month's interest.
Compare common refinance situations
To test a lower proposed rate, enter that loan's fees and review cash to close beside the payment difference. Cash-out amount ($, optional) shows how added borrowing changes the new loan amount, points cost, payment, and holding-period total.
If a move or payoff is planned, enter that time in Planned holding period (years, optional). The comparison covers that period and marks its rounded year in the annual schedule.
Choose a calculator for the next question
Browse Financial Calculators for Loans, Pay, Debt & Savings for related decisions. Use the Amortization Calculator for one loan's period-by-period principal, interest, and balance schedule. Use the APR Calculator to calculate APR from fees, rate, term, payment frequency, and timing. The Loan Calculator covers a single loan payment, total interest, and total cost.
Frequently asked questions
How do I use a refinance calculator to compare two mortgages?
Enter the current mortgage values and proposed refinance values, add fees or Cash-out amount ($, optional), then click Calculate. The result shows payment differences, cash to close, break-even, interest, and holding-period totals.
What does the refinance break-even month include?
The break-even month uses closing costs plus points divided by monthly principal-and-interest savings. It keeps those fees in the calculation when they are rolled into the new loan, and the result omits the month when the new payment is not lower.
Can a mortgage refinance calculator include closing costs and cash-out?
Enter Closing costs ($), Points (optional), and Cash-out amount ($, optional). Select Roll closing costs & points into the new loan to add closing costs and points to the new balance.
Does the Refinance Calculator use live mortgage rates?
The calculator uses the numbers entered in the form and fixed-rate formulas. Its calculation runs in the browser, and the page code makes no request that sends the entered values to a server.