Compare your current mortgage to a refinance offer side by side — monthly savings, break-even timeline, and total interest over the life of both loans.
The calculator computes your current monthly payment on the remaining balance and term, then computes the new payment on the new rate and term. Break-even is the number of months until your cumulative monthly savings cover the closing costs.
Break-even (months) = Closing costs ÷ Monthly savings If you plan to stay in the home past this point, refinancing saves money overall. If you will move or refinance again before then, it likely does not.
Why remaining term matters as much as rate
Resetting to a new 30-year term can lower your monthly payment even at a similar rate, but extends how long you pay interest — sometimes increasing total lifetime interest despite the lower payment. Compare the total interest figures above, not just the monthly number, before deciding.
When refinancing is usually worth it
As a rule of thumb, refinancing tends to make sense when the new rate is at least 0.75-1% below your current rate, you plan to stay in the home longer than the break-even period, and you are not restarting a fresh 30-year clock late into an existing loan.
It depends on your rate gap, how long you plan to stay, and closing costs. As a guideline, a 0.75%+ rate reduction combined with staying past the break-even point (often 2-4 years) usually makes refinancing worthwhile.
How much does it cost to refinance a mortgage?
Typical closing costs run 2-5% of the loan amount — commonly $4,000-$9,000 on a $300,000 refinance, covering origination, appraisal, title insurance, and recording fees.
What is the break-even point on a refinance?
The number of months of payment savings needed to recoup your closing costs. Closing costs divided by monthly savings. Below 3 years is generally considered a strong break-even; above 5 years is marginal for most homeowners.
Does refinancing restart my mortgage clock?
Only if you choose a new 30-year term. You can refinance into a shorter term (e.g. remaining 26 years, or a 15-year loan) to avoid extending your total payoff timeline, usually at a lower rate but higher monthly payment.
Can I refinance with no closing costs?
Yes, "no-cost" refinances exist but roll the closing costs into a higher interest rate instead of an upfront payment — you pay for them over time rather than at closing. Compare the total interest cost, not just whether cash is due upfront.