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Refinance Calculator

A lower rate on paper doesn't automatically mean a refinance pays off. Everything hinges on one number this page is built around: the break-even point, measured in months, where your monthly savings finally cover what closing costs took out of your pocket.

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New monthly payment -
Current payment -
Monthly savings -
Break-even -

Estimates only. Not financial advice.

Chris Terry
Calculator by Chris Terry, Owner and Editor
Last updated July 18, 2026

Average 30-year fixed rate as of June 25, 2026: 6.49%, down from 6.77% a year earlier (Freddie Mac PMMS). Full history on the average rates page.

Break-even by closing cost and monthly savings

Monthly savings$2,000 costs$4,000 costs$6,000 costs
$15013 months27 months40 months
$2867 months14 months21 months
$4005 months10 months15 months

Find your row, find your column, and you have a rough answer before touching the calculator above. Higher monthly savings and lower closing costs both shrink the wait; the only question left is whether you'll still be in the house by then.

The arithmetic behind both payments

Both payments come from the same formula, M = B times i, over 1 minus (1 plus i) to the negative n, run twice with different rates and terms. On a $250,000 balance at the current 6.8 percent over 26 remaining years, that's 312 months, the payment is about $1,706. At a new 5.5 percent over a fresh 30 years, 360 months, the payment is about $1,420. The gap, roughly $286 a month, is what pays back the $4,000 in closing costs in around 14 months. After that point, the $286 a month is yours.

Watch the term reset. Refinancing a 26-year remaining balance into a new 30-year loan lowers the payment partly by stretching repayment back out, which can raise total interest even at a lower rate.

Full amortization schedule, new loan

Every payment on the proposed refinance, broken into interest and principal, using your current inputs.

What the Loan Estimate won't tell you outright

A lower rate is only one input in whether a refinance actually helps. The new term length, any points paid to buy the rate down, and the closing costs all move the answer, and none of them show up in a single headline number a lender quotes over the phone. Ask for a written Loan Estimate and compare the total closing costs line by line against what this calculator assumes; if the goal is paying off the house sooner rather than lowering the bill, matching the new term to your remaining years, or simply paying extra principal on the loan you already have, can beat a refinance entirely.

Sources: CFPB on refinancing, CFPB Loan Estimate explainer.

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FAQs

I'm planning to sell in two years. Is refinancing still worth it?

Only if the break-even point falls before your expected sale date. If closing costs take 24 months to recover through monthly savings and you sell in year two, you'll have paid the closing costs without fully recovering them. Compare the break-even number directly against your realistic timeline in the home.

Does refinancing restart my mortgage interest clock?

Yes, functionally. Amortization is front-loaded with interest, so refinancing into a new 30-year term after you've already paid down several years of a prior loan resets that curve, even if the new rate is lower. That can mean more total interest paid over the full life of the two loans combined, despite the lower monthly payment.

Should I refinance into the same remaining term instead of a fresh 30 years?

If the goal is paying off the house faster rather than lowering the payment, matching your new loan's term to your remaining years (or shorter) avoids restarting the interest curve, though the monthly payment will be higher than resetting to a full 30-year term.

What if I don't know my exact closing costs yet?

Use a conservative estimate, most conventional refinances run 2 to 5 percent of the loan amount, until you have a Loan Estimate in hand. Once a lender provides the actual closing cost figure, rerun the numbers here with the real amount rather than the estimate.