Mortgage Refinance Calculator (2026)
Compare your current loan with a refinance: new monthly payment, break-even point and lifetime interest. Defaults reflect a typical 2024-era loan at today's rates.
Refinance calculator
Break-even is the number that decides it
Refinancing costs money up front, and the only honest way to compare offers is the month you get that money back: closing costs divided by the monthly payment reduction. A $3,600 cost against $150 a month saved breaks even in 24 months. Sell or refinance again before that month and the refinance lost money — which is why the useful question is not "is the new rate lower" but "will I still be in this loan when the savings have passed the cost".
The familiar rule of thumb — wait for a 0.5–1% rate drop — is a proxy for that arithmetic, not a rule. This calculator computes the break-even from your own numbers, including the case where the new loan has a shorter term and the payment goes up: a smaller total interest bill can still be the better outcome.
What it actually costs
Plan on 2–5% of the loan amount: origination, appraisal, credit report, title search and lender's title insurance, recording, and per-diem interest to the end of the month. A cash-out refinance usually runs higher because the loan is larger. A "no closing cost" refinance is not free — the fees come back as a higher rate or a larger balance, which is the same money paid over a longer time. The closing cost calculator breaks the items down by state, including who pays the transfer tax.
One cost that rarely appears in the quote: restarting the clock. Refinancing a 30-year loan in year seven with another 30-year loan moves the payoff date out by seven years. If the goal is to be done sooner, compare the 15-year term before choosing the lower payment.
Rate-and-term versus cash-out
A rate-and-term refinance replaces the loan on the same balance, usually to cut the rate or the term. A cash-out refinance borrows against your equity and hands you the difference in cash. That can be reasonable for a renovation or to retire high-interest debt, and it is also how people quietly turn a nearly-finished mortgage back into a 30-year one and put the roof over a larger loan.
If the only goal is to stop paying PMI, a rate-and-term refinance to 80% loan-to-value removes it without borrowing more — but so does asking the servicer once the balance reaches 80%, which costs nothing. How PMI comes off compares the two routes before you pay for an appraisal.
Last reviewed Oct 25 2026
Frequently asked questions
When does refinancing make sense?
The classic rule: refinance when you can cut your rate by enough to recoup closing costs within the time you'll keep the loan — commonly quoted as a 0.5%–1% rate drop with a break-even under 2–3 years. This calculator shows your exact break-even instead of a rule of thumb.
Should I pick a shorter term when I refinance?
If your income supports it, refinancing from a 30-year into a 20- or 15-year loan usually raises the monthly payment but can save five figures of interest. Compare the 'lifetime interest' numbers here — a slightly higher payment is often worth it.
What is a cash-out refinance?
You replace your mortgage with a larger one and take the difference in cash. It's often the cheapest way to borrow against your home, but it increases your balance and can raise your payment — model it with the cash-out field above.