Estimated monthly payments include principal and interest and are not an offer to lend. Tax, insurance, and other fees and charges may apply. Default interest rate displayed is illustrative only. Interest rates, total cost of mortgage, and monthly mortgage payment are estimates based on information provided. Actual mortgage payment and interest rate may be higher or lower than those displayed and will depend on your mortgage product, collateral, and credit history.
Crunch your own numbers with our mortgage calculators for refinance or a purchase loan, and run as many different scenarios as you’d like.
What It Shows
- Lifetime interest savings across the full term
- Monthly payment difference vs your current loan
- Break-even point, measured in months
What It Doesn’t
- Your binding rate or final closing costs
- Whether you’ll qualify for the refi
- Tax or insurance shifts after closing
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Refinancing Terms Glossary
Every input and output the calculator uses, explained in plain terms.
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Inputs (New Loan)
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Frequently Asked Questions
How does this calculator estimate my refinance interest savings?
The calculator runs two amortization schedules side by side. The first is your current mortgage, based on its original loan amount, rate, term, and the number of years you’ve already paid. The second is the refinanced mortgage, built from the new term, rate, and closing costs you enter, plus any cash-out. Its balance carries over from what you still owe on your current loan. The total interest on each schedule is compared, and the difference is your total interest savings.
The monthly savings line is simpler. It’s the difference between your current monthly principal-and-interest payment and the new monthly payment on the refinanced mortgage. The break-even point is calculated by dividing your closing costs by your monthly savings. If you stay in the home past that month count, the refinance starts paying you back in net savings.
What’s a “break-even point” and why does it matter for refinancing?
The break-even point is the number of months it takes for your monthly savings to recoup the closing costs you paid to refinance. If your closing costs are $4,800 and your refinance lowers your monthly payment by $300, your break-even point is 16 months. After month 16, every dollar of monthly savings is a net gain on the refinance.
It matters because refinancing only makes sense if you plan to stay in the home past the break-even point. A refinance with a 16-month break-even is worth doing if you’ll be there for at least three years; one with a 60-month break-even is a much closer call if you’re planning to move in five. Use the break-even figure to stress-test the refinance against your timeline before making the call.
Lifetime savings vs monthly savings: which one should I optimize for?
Both matter, but they answer different questions. Monthly savings is about your cash flow today: a lower payment means more breathing room in your monthly budget. Lifetime savings is about your total cost of the loan over time: it includes the compound effect of paying less interest on a smaller balance for longer. A refinance that drops your rate but extends your term can lower the monthly payment while increasing the lifetime cost, and vice versa.
If you’re optimizing for monthly cash flow (lower payment, easier to afford), focus on the monthly savings figure. If you’re optimizing for total wealth (less money spent on the loan over time), focus on lifetime savings. The right answer often depends on how long you plan to stay and what other financial priorities you have. A loan officer can model both against your specific situation if you want a second look.
What does this savings estimate not include?
The savings figure is interest-only. It doesn’t account for several variable costs that affect what you actually pay or save. Closing costs are entered as a line item but won’t perfectly match the final closing disclosure (lender fees, title, recording, appraisal, and prepaid escrow all vary by lender and property). Property taxes and homeowners insurance are escrowed monthly but aren’t part of the interest-savings calculation, so changes in tax or insurance after refinancing don’t show up here.
Use the savings number as a directional indicator. The binding numbers come from a loan estimate after you start an application.
Does refinancing reset my mortgage term, and how does that change my actual savings?
Yes, by default. When you refinance into a new 30-year mortgage three years into your current 30-year, you’ve reset the clock. The new loan runs 30 years from origination, meaning you’ll be making payments for 33 total years between the two mortgages. The lower monthly payment looks attractive, but you’re paying interest on a smaller balance for a longer stretch, which can erode some of the lifetime savings the calculator shows.
You have options. You can refinance into a shorter term (15 or 20 years) to match or beat your original payoff timeline, often at an even lower interest rate. Or you can refinance into a new 30-year and pay extra principal each month to keep the payoff timeline close to where it would have been. The calculator shows the savings assuming you don’t change your payment habits; if you make extra payments, your actual savings are higher than the figure displayed.
By refinancing the existing loan, the total finance charges may be higher over the life of the loan.