Existing mortgage planning

Refinance Mortgage Calculator

Compare your remaining mortgage with a proposed refinance using monthly payment, closing-cost break-even, five-year borrowing cost, remaining balance, and lifetime interest.

Reviewed by the Mortgage Easy App Editorial TeamUpdated October 18, 2026Editorial standards

Current loan and proposed refinance

Replace the example figures with your mortgage statement and Loan Estimate.

Current mortgage

Use the unpaid principal balance, note rate, and remaining scheduled term.

Remaining loan balance

Current interest rate

Years remaining

years

Prepayment penalty

Enter zero if your current loan has none.

Proposed refinance

Use the rate, APR, term, and loan costs from the same lender quote.

Proposed interest rate

Proposed APR

APR is a comparison rate, not the payment rate.

New loan term

Refinance closing costs

Include lender and required third-party loan costs.

Additional cash out

Leave at zero for a rate-and-term refinance.

Finance the refinance costs

Adds entered costs to the new principal instead of treating them as cash due at closing.

Your planning horizon

Years you expect to keep this loan

years

Use the earlier of when you may sell, refinance again, or pay off the loan.

Refinance comparison

Principal-and-interest estimates based on the terms entered.

The refinance may recover its costs within your plan

The modeled monthly savings recover the entered refinance costs before your expected holding period ends, and the interest-and-fee cost is lower over that period.

Proposed payment

$1,750.72

Monthly principal and interest

Monthly change

$369.62 lower

Taxes, insurance, HOA, and mortgage insurance excluded

Simple break-even

1y 5m

$6,000 in entered refinance costs

7-year cost change

$17,351 less

Interest plus entered refinance costs, excluding principal

Current loan versus proposed refinance

The proposed balance includes financed costs and cash out when selected.

Metric	Current loan	Proposed refinance
Loan balance	$300,000	$300,000
Interest rate	7.000%	5.750%
Remaining/new term	25.0 years	30 years
Monthly principal & interest	$2,120.34	$1,750.72
Interest and fees in first 5 years	$100,707	$89,330
Principal paid in first 5 years	$26,514	$21,713
Balance after 7 years	$260,004	$267,701
Remaining lifetime interest and fees	$336,101	$336,259

Cost over your planning horizon

Interest and entered refinance costs through year 7; principal repayment is excluded.

Keep current loan$138,112

Proposed refinance$120,761

New loan amount: $300,000
Cash costs at closing: $6,000
Costs added to balance: $0

Planning assumptions

Fixed-rate, fully amortizing loans with payments made as scheduled. Break-even is the entered refinance costs divided by monthly principal-and-interest savings. Property taxes, homeowners insurance, HOA dues, mortgage insurance, tax effects, and investment returns are not included.

Start with the reason

A lower payment is helpful only when you know what made it lower

You receive a refinance quote and the new payment is $250 lower. That sounds like an easy decision. But the payment may have fallen because the rate is lower, because the loan has been stretched over more years, or because closing costs were added to the balance. Those three offers can show the same payment and leave you with very different costs.

Refinancing pays off the mortgage you have and replaces it with a new one. You apply again, qualify again, and accept a new rate, term, balance, and set of closing costs. Before comparing offers, decide what the new loan needs to improve. Otherwise, it is too easy to focus on the one number a lender makes look attractive.

Pay less for the debt you already have

A lower rate can reduce interest and may lower the payment. The savings are real only after the cost of getting the new loan is taken into account.

Pay the home off sooner

A shorter term may raise the required payment, but it can build equity faster and cut years of interest from the loan.

Replace an uncertain rate

Moving from an adjustable rate to a fixed rate can make future principal-and-interest payments easier to plan for, even when the immediate savings are modest.

Borrow equity for one clear purpose

A cash-out refinance can fund a major repair or another planned expense. The cash is not free money; it becomes debt secured by the home.

When the numbers are worth pursuing

A refinance starts to make sense when the benefit lasts longer than the cost

There is no rate drop that automatically makes refinancing a good deal. A half-point reduction may be useful on a large balance with low fees. A much larger reduction can still disappoint if the costs are high or you expect to move next year. What matters is the offer you can actually qualify for and how long you are likely to keep it.

What a stronger offer usually looks like

The payment falls for the right reasonMost of the reduction comes from better pricing, not simply from restarting the debt with another 30-year term.
You will probably keep the loan past break-evenIf the refinance costs $6,000 and saves $200 a month, the simple break-even point is 30 months. A likely move in two years would change the answer.
The balance is what you expectedAny increase can be traced to closing costs or cash out that you knowingly chose to finance.
The long-term cost still supports your goalThe five-year cost, balance after your planned time in the home, and lifetime interest do not tell a worse story than the monthly payment.
The full housing payment remains comfortableProperty taxes, insurance, mortgage insurance, and association dues still fit after the refinance, with emergency savings left intact.

When refinancing may do more harm than good

You expect to sell or refinance again before break-evenThe new loan may end before it has had time to repay its own costs.
The payoff date moved much farther awayA lower payment can provide short-term relief while adding years of interest.
A no-closing-cost offer is being described as freeThe cost may be covered by a higher rate, a lender credit tied to that rate, or fees added to the loan balance.
The new payment would leave little room for ordinary lifeLender approval does not mean the payment will be comfortable alongside repairs, taxes, insurance, and other household needs.
Cash out is covering a budget that is already shortMoving recurring expenses onto the home creates a larger secured debt without fixing the reason the budget is under pressure.

The question to answer before moving forward

After the fees are paid and the new payoff date is considered, does this loan leave you in a better position during the years you expect to keep it? For a shorter-term refinance, that better position may be faster payoff rather than a lower payment. For cash out, it depends on whether the planned use of the money is worth the added debt and risk to the home.

CFPB refinance decision guide Freddie Mac refinancing guide

Next, choose the kind of refinance

Are you replacing the loan, or replacing it and borrowing more?

This distinction changes how the result should be judged. A rate-and-term refinance changes the financing on debt you already have. A cash-out refinance also converts part of your home equity into new debt.

Replace the financing

Rate-and-term refinance

The new mortgage mainly pays off the existing balance. The homeowner is looking for a better rate, a different payoff period, or a more suitable loan structure without taking meaningful cash from the property.

How the balance changes

Existing balance

Replacement loan

It may be worth considering if:

The expected interest savings can recover the closing costs before the home is sold or the loan is replaced again.
A shorter term moves the payoff date closer, and the new payment remains comfortable.
A fixed rate would provide more useful stability than the current adjustable rate.

Replace the loan and borrow more

Cash-out refinance

The new mortgage pays off the existing balance and provides additional cash from the homeowner's equity. That cash is borrowed money, so it increases the new balance and is repaid with interest.

How the balance changes

Existing balance

New balance + cash out

It may be worth considering if:

The money has a defined purpose, such as a substantial repair or improvement to the property.
The complete cost compares favorably with a home-equity loan, line of credit, or another suitable option.
The added debt remains affordable, and the homeowner accepts that it is secured by the property.

The next step depends on the type you choose

For a rate-and-term refinance, the next question is whether the payment and interest savings recover the cost of replacing the loan. For cash out, you also need to decide whether the purpose of the money is worth the added mortgage debt. The sections below walk through those comparisons.

Cost recovery

A lower rate matters only if the refinance works on your timeline

Refinancing replaces the current mortgage with a new loan. The proposed payment can fall while closing costs, financed fees, or a restarted term absorb part of the benefit. A simple break-even estimate divides refinance costs by monthly principal-and-interest savings.

Compare that break-even period with how long you realistically expect to keep the new loan. Selling, refinancing again, or paying the loan off before then can prevent the modeled monthly savings from recovering the costs.

Read the result in this order

1Confirm the new loan amount, rate, APR, term, and closing costs match one Loan Estimate.
2Check whether the monthly principal-and-interest payment rises or falls.
3Compare the break-even period with your expected holding period.
4Review the five-year and lifetime costs for a term-reset trade-off.
5Compare remaining balances, especially when costs are financed or cash is taken out.

Term comparison

A 30-year refinance can lower the payment without producing the lowest cost

This example starts with a $300,000 balance, a 7% rate, 25 years remaining, a proposed 5.75% rate, and $6,000 of cash-paid refinance costs. Changing only the new term shows why payment relief and long-term savings are separate decisions.

New term	New P&I	Monthly change	Simple break-even	Lifetime interest + fees
15 years	$2,491	$371 higher	Not reached	$154,421
20 years	$2,106	$14 lower	426 months	$211,500
30 years	$1,751	$370 lower	17 months	$336,259

Read the offer before trusting the savings

Put the Loan Estimate beside the calculator

The advertisement gets your attention. The Loan Estimate tells you what the lender is actually proposing. Take the rate, APR, term, loan amount, and costs from one Loan Estimate so the calculator reflects a loan that truly exists. Mixing the low rate from one quote with the low fees from another creates a deal that neither lender offered.

Later, place the Closing Disclosure next to the most recent Loan Estimate. Read them line by line. A refinance should not become a different loan while you are on the way to the closing table.

CFPB Loan Estimate explainer

Start at the top of page 1
Confirm the loan purpose, term, product, loan type, and amount. If you asked for a fixed-rate, rate-and-term refinance, those words and figures should describe that loan.
Check whether the rate is locked
An unlocked rate can change before closing. If it is locked, note the expiration date and ask what an extension would cost if closing is delayed.
Read the projected payment
Look beyond principal and interest. Mortgage insurance and escrowed taxes or insurance can change the amount that actually leaves your bank account.
Follow every dollar of cost
On page 2, review origination charges, points, third-party services, lender credits, and the total closing costs. Ask whether any of these costs are being added to the new balance.
Use page 3 to compare the offers
APR and the five-year comparison can reveal differences that the note rate and monthly payment do not show on their own.

Documented closing risks

Stop before you sign if the paperwork does not match the deal

If any item below appears unexpectedly, pause the closing. Ask for a plain-language explanation and corrected documents in writing. If the lender will not explain or correct the issue, do not sign the loan.

1
The loan is not the product you agreed to
If the paperwork shows an adjustable rate, balloon payment, prepayment penalty, increasing loan balance, cash out, or a longer term that was not part of the discussion, stop and ask why the loan changed.
2
The important numbers changed without a clear reason
If the rate, loan amount, payment, closing costs, lender credits, or cash needed at closing no longer match the latest Loan Estimate, ask for an explanation before moving forward.
3
Costs were added to the balance without your approval
If the cash due at closing is lower but the new loan balance is higher, check whether fees, points, or another charge was added to the amount you will repay.
4
The final documents arrived too late to review
If you do not receive the Closing Disclosure at least three business days before closing for a refinance covered by this requirement, contact the lender before the scheduled signing.
5
You are asked to sign blank or inaccurate documents
If a form is blank or describes a different transaction, do not sign it. A promise to correct the paperwork after closing is not a correction.
6
Your questions are met with pressure instead of answers
If a lender rushes you, cannot explain a last-minute change, or refuses to put the explanation in writing, step back until the issue is resolved.

These checks follow CFPB guidance for reviewing Loan Estimates and Closing Disclosures. An unexpected item is not proof of wrongdoing, but it is a reason to stop, ask why, and make sure the written loan matches what you agreed to before signing.

CFPB Loan Estimate review CFPB Closing Disclosure explainer CFPB mortgage closing checklist

Calculation transparency

The comparison keeps payment relief separate from borrowing cost

The calculator models the current and proposed loans independently, then compares them over the time you expect to keep the refinance and over each loan's remaining life. That prevents a longer term from appearing cheaper simply because its payment is lower.

1
Model the current loan
The remaining balance, note rate, and months left determine the current principal-and-interest payment, future interest, and projected balance.
2
Build the proposed balance
Cash out and any financed closing costs are added to the amount refinanced. Costs paid at closing remain outside the new principal.
3
Measure break-even carefully
When the proposed principal-and-interest payment is lower, entered refinance costs are divided by monthly savings. No savings-based break-even is shown when the payment does not decrease.
4
Compare matching time periods
Holding-period cost includes payments, upfront costs, and the remaining balance at the selected horizon. Lifetime cost compares the debt through each modeled payoff.

Worked example

A lower rate paired with a shorter new term

This illustration holds the refinance for seven years and pays the entered closing costs in cash rather than adding them to the balance.

Assumptions

Current mortgage: $300,000 at 7.00%
Current time remaining: 25 years
Proposed mortgage: 5.75% for 20 years
APR / closing costs: 5.95% / $6,000

Estimated result

Current monthly P&I: $2,120.34
Proposed monthly P&I: $2,106.25
Simple break-even: 426 months
Estimated lifetime advantage: $124,601

The monthly payment falls by only $14.09, so the simple break-even looks weak. The lifetime comparison is different because the proposed loan ends five years sooner. This is why payment, break-even, term, and remaining balance belong in the same decision.

Common questions

Refinance calculator questions

How much lower should a new rate be before I refinance?+

There is no rate reduction that works for every homeowner. The answer depends on the remaining balance, closing costs, points, new term, and how long the new loan is likely to remain in place. A modest reduction may be valuable on a large balance with low costs, while a larger reduction may offer little benefit if the loan is expensive to obtain or will be replaced soon.

Do homeowners need to refinance their mortgage?+

Refinancing is generally optional. It may be worth exploring when a new mortgage could reduce borrowing costs, make the payment more manageable, provide a more predictable rate, shorten the payoff period, or provide carefully planned access to home equity. Those benefits still need to outweigh the costs and trade-offs of replacing the existing loan.

How is the refinance break-even point calculated?+

This calculator divides the entered refinance costs by the estimated monthly principal-and-interest savings. It is a simple planning estimate. If the proposed payment is not lower, a monthly-savings break-even point is not produced.

Does a lower refinance payment always mean the loan costs less?+

No. Restarting with a longer term can lower the required monthly payment while increasing the number of payments and total interest. Compare the holding-period and remaining lifetime costs, not only the monthly payment.

What happens when refinance closing costs are financed?+

Financed costs are added to the proposed loan balance instead of being treated as cash due at closing. That increases the amount on which interest is calculated and can reduce the apparent monthly benefit.

How is a cash-out refinance treated?+

Cash out is added to the proposed loan amount. Because the homeowner is borrowing additional money, the calculator labels the result as a cash-out review rather than treating the payment or cost difference as a simple rate-and-term saving.

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