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 calculation compares your current mortgage payment against a new one, then factors in closing costs to determine how long it takes to break even.
Core formulas:
Monthly Savings = Old Payment − New Payment
Break-Even Months = Total Closing Costs / Monthly Savings
Each monthly payment is calculated using standard amortization: M = P × [r(1+r)^n] / [(1+r)^n − 1]
Worked example: Current loan: $320,000 remaining at 7.25%, 27 years left → Payment = $2,213/month New loan: $320,000 at 5.75%, 30-year term → Payment = $1,868/month Monthly savings: $2,213 − $1,868 = $345/month Closing costs (typical 2–3%): $320,000 × 2.5% = $8,000 Break-even: $8,000 / $345 = 23.2 months (~2 years)
If you plan to stay in the home more than 2 years, refinancing makes financial sense.
Closing cost components to include:
- Origination fee: 0.5–1% of loan
- Appraisal: $400–$700
- Title search and insurance: $500–$1,500
- Recording fees: $50–$200
- Prepaid interest (prorated days)
Factors that affect the decision:
- Remaining term: Resetting to 30 years from a 27-year loan means 3 extra years of payments — your total interest paid may increase even with a lower rate
- Rate drop threshold: A common rule of thumb is to refinance only if you reduce your rate by at least 1% — but even 0.5% can be worth it on large balances
- Cash-out refinance: Increases principal and interest paid — calculate separately
- No-closing-cost refi: Higher rate offsets the savings — usually worse long-term
How we build and check this calculator
This calculator runs entirely in your browser, so the numbers you enter stay on your device. The math behind it is written by hand and tested against worked examples and standard references before the page goes live.
SuperGlobalCalculator is independently built and maintained. See how we build and verify our calculators.