Refinance Calculator
Estimate monthly savings, break-even, and long-term benefit.
What this calculator helps you estimate
Compare your current mortgage to a proposed new mortgage to estimate monthly savings, break-even time, and the long-term net financial benefit.
Refinancing can lower your monthly payment, shorten your loan, remove mortgage insurance, or unlock equity — but the right decision depends on the numbers. Enter both mortgages below to compare.
Inputs
Current & proposed mortgage
Current mortgage
Proposed mortgage
Results
Refinance comparison
Interpretation
Based on the information entered, your estimated break-even point is approximately 0 months. If you plan to stay past then, refinancing may make financial sense.
Resetting to a longer term can lower the payment but increase total interest paid. Consider your time horizon.
Understand the math
How this calculator works
Refinancing is a trade: you pay closing costs now in exchange for a different rate, term, or structure. This calculator compares your current mortgage to a proposed new one side by side, showing the exact monthly savings and how many months it takes those savings to repay the upfront cost.
Worked example
Current: $350,000 balance, 7.5% rate, 25 years remaining. Proposed: refinance the same $350,000 at 6.25% for a new 30-year term, with $6,000 in closing costs.
- Current payment (7.5%, 25 yrs) ≈ $2,586.47
- New payment (6.25%, 30 yrs) ≈ $2,155.01
- Monthly savings = $2,586.47 − $2,155.01 = $431.46
- Break-even = $6,000 ÷ $431.46 ≈ 13.9 months
Break-even in roughly 14 months; after that, the refinance is net-positive if you stay in the home.
How to read your results
Interpretation guidance
- If you plan to stay in the home longer than the break-even month, the refinance is generally worth considering.
- Watch for a restarted term — refinancing years of paid-down debt into a new 30-year loan can raise lifetime interest even at a lower rate.
- Rolling closing costs into the loan preserves cash but slightly raises the balance and the true break-even.
- Compare rate-and-term savings against any equity you might instead access via a cash-out refinance.
Deeper answers
More questions about this calculator
When does refinancing break even?
Break-even is the number of months of monthly savings it takes to recover the upfront closing costs. If you expect to stay past that point, refinancing may make financial sense.
Does a lower payment always mean I should refinance?
Not necessarily — stretching the term can lower the payment while increasing total interest paid. Weigh the break-even period against how long you plan to stay.
Are closing costs included in this estimate?
Yes. Enter your estimated closing costs and any points so the break-even and long-term benefit reflect the real cost of the transaction.
Can I use this for a cash-out refinance?
This tool focuses on rate-and-term comparisons. Use the cash-out refinance calculator to model accessing equity.
Results are estimates for educational purposes only and are not a commitment to lend, loan approval, or official Loan Estimate. Actual rates, payments, costs, taxes, insurance, mortgage insurance, eligibility, and loan terms may vary.
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Answers
Frequently asked questions
When does refinancing break even?
Break-even is the number of months required for the monthly savings to recover the upfront costs of the refinance. If you expect to stay in the home longer than the break-even point, refinancing may make financial sense.
Does a lower payment always mean I should refinance?
Not always. Extending your term can lower the payment while increasing total interest paid over time. Consider the break-even period, how long you plan to stay, and whether other goals — shortening the term, removing MI, or accessing equity — apply.
Are closing costs included?
Yes. Enter estimated closing costs, points, and any costs you plan to finance. These upfront costs are used to calculate break-even and net long-term benefit.
Next step
Numbers are helpful. A personalized strategy is better.
Review your scenario with a Vabasso mortgage expert. No pressure, no obligation — just clear guidance for your next move.