Refinance tool
Refinance Calculator
A refinance is a trade: you pay closing costs now for a different stream of payments later. This calculator answers the two questions that actually decide it — how many months until the closing costs pay for themselves, and whether the new loan is genuinely cheaper or just stretched thinner.
Context rate: the Freddie Mac PMMS 30-yr average was 7.03% the week of September 24, 2026. Refinance quotes usually sit slightly above purchase rates — enter the rate from a real Loan Estimate.
Refinance calculator
Compares your current loan against the new one honestly — including the trap most refinance calculators skip: stretching the term back to 30 years can lower your payment while raising lifetime interest.
The payback question
17.4 months
to recoup $4,000 in closing costs from $229.88/mo savings ($2,126.08 → $1,896.20)
Monthly savings
$229.88
Interest left on current loan
$337,825
Interest on new loan
$382,633
The term-reset trap, shown honestly
You'd be adding 60 months to your payoff. Truncated to the same horizon, the old loan would cost $337,825 in interest and still owe $0 at the end — while the new loan runs to $382,633 total interest. Lower payment ≠ cheaper loan.
Every figure here is formula output from cited defaults (rate, deductions, taxes shown in the assumptions). Planning estimate — not tax or financial advice.
Method notes
- Monthly figures use the standard amortizing formula; payback = closing costs ÷ monthly savings (a break-even on cash flow, not on total interest).
- Lifetime-interest rows compare each loan on its own horizon; the truncation panel above handles the term-extension case.
- Excludes: escrow differences, PMI restart, cash-out amounts, and the time value of the closing costs.
- Estimates only — not a loan offer. Your lender's Loan Estimate governs.
How to read the result
The payback period is closing costs divided by monthly savings. If you're confident you'll keep the loan past payback, the cash-flow math favors refinancing; if a move is plausible before then, it probably doesn't. The calculator flags payback over four years for exactly that reason.
The term-reset trap deserves its own panel. Refinancing a 25-years-left loan into a fresh 30-year loan lowers the payment while adding five years of interest accrual. Our result shows what the old loan would cost truncated to the new loan's horizon, so “lower payment” and “cheaper loan” stop being confused with each other.
What's deliberately excluded: escrow changes, PMI restarting on a high-LTV refinance, cash-out amounts, and the time value of the closing costs. The method notes inside the calculator restate all of it with every result.
Not refinancing yet but want a lower rate? The same trade exists at purchase: the mortgage points calculator prices the break-even on buying the rate down with points — the same upfront-cost-versus-monthly-saving shape, at closing instead of mid-loan.
FAQ
Is a cash-out refinance worth it?
Computationally, it is three numbers against each other: the new rate versus your current rate, the new term's total interest versus what your remaining schedule would cost, and the amount you draw added to the balance you pay interest on. A cash-out refinance trades a larger loan for cash at closing — the calculator above prices the rate-and-term side, and the payback period it reports is the break-even rule the decision turns on. What the draw itself is worth is a function of what the cash funds, which no calculator can price for you.
When is the right time to refinance?
The computable version of the question is the break-even: closing costs divided by monthly savings. Refinancing pays when you keep the new loan past that month count — the calculator flags payback over four years because moves are common before then. A rate-drop of roughly half a point to a point is where payback typically lands in a workable range on moderate balances, but the inputs are yours; the rule is the constant.
What is the term-reset trap?
Refinancing a loan with years already paid into a fresh full-term loan lowers the monthly payment while extending the years of interest accrual — the payment drops partly because you restart the amortization clock. The calculator shows the honest version side by side: what the old loan would cost truncated to the new loan's horizon, next to the new loan's total, so “lower payment” and “cheaper loan” stop being confused.
Where to go next
Compare the new payment honestly in the mortgage calculator (a refi's payment is just a new amortization on your remaining balance), see what the closing-cost stack includes in the closing cost calculator, and model the counterfactual — what extra payments do to your current loan instead of a refi — in the mortgage payoff calculator.