Refinance Savings Calculator
Calculate how much refinancing your mortgage saves you.
Compare old vs new loan payments, break-even point, and total interest savings.
Refinance Savings
Refinancing replaces your current mortgage with a new one, ideally at a lower rate.
The monthly payment formula for each loan:
M = P × [r(1+r)^n] / [(1+r)^n - 1]
Break-even point tells you how many months until the savings exceed the closing costs:
Break-Even Months = Closing Costs / Monthly Savings
Lifetime savings = Total remaining payments on old loan − Total payments on new loan − Closing costs.
Example: Refinancing a $300,000 balance from 6.5% to 5.5% (30 years), with $5,000 closing costs:
- Old payment = $1,896/month
- New payment = $1,703/month
- Monthly savings = $193
- Break-even = 26 months
- Lifetime savings after costs = $64,489
Tips:
- Refinancing makes sense if you plan to stay past the break-even point
- Even a 0.5% rate drop can save tens of thousands over the life of the loan
- Consider a shorter term — higher payment but much less total interest
- Factor in all closing costs including appraisal, title, and lender fees