igmetricThe two loans
Current loan
Refinance offer
How the analysis works
- Payments use the standard amortization formula: P = B × i(1+i)n ÷ ((1+i)n − 1), with monthly compounding.
- Breakeven = closing costs ÷ monthly savings. It answers: how many months until the refi has paid for itself? Selling or refinancing again before that month means the refi lost money.
- Cost over your stay simulates both loans month by month for exactly the years you plan to stay: interest paid on each, plus closing costs on the refi side. This is the number that matters — not lifetime interest on a loan you won't keep for its full term.
- The reset-clock trap: refinancing 20 years remaining into a new 30-year loan usually lowers the payment but adds 10 years of interest. If the new term exceeds your remaining years, watch the lifetime comparison closely.
- Assumes closing costs paid in cash (not rolled into the balance), fixed rates, and principal + interest only — no taxes, insurance, HOA, or PMI.
Frequently asked questions
How do I know if refinancing is worth it?
Three numbers decide it: the monthly savings, the breakeven point (closing costs divided by monthly savings), and whether you'll stay past breakeven. A refi that saves $250/month with $8,000 in costs breaks even in 32 months — move before that and you lost money.
What is the breakeven point on a refinance?
Closing costs divided by monthly payment savings. It is the number of months you must keep the new loan before the savings repay what the refinance cost you.
Can refinancing cost more even with a lower rate?
Yes — the classic trap is restarting the clock. Refinancing a loan with 20 years left into a new 30-year loan at a lower rate cuts the payment but can raise lifetime interest, because you're paying for 10 extra years. Compare total interest over your actual stay, not just the payment.
Should closing costs be rolled into the loan?
This calculator assumes you pay them in cash, which is the cheapest option. Rolling costs into the balance means paying interest on them for the life of the loan — convenient, but it raises the true cost of the refinance.
How accurate is the monthly payment math?
It uses the standard fixed-rate amortization formula with monthly compounding, which matches how US mortgages are quoted. Taxes, insurance, HOA, and PMI are not included — compare principal and interest only.
Related calculators
- Mortgage Payoff — what extra principal payments save in interest and years.
- Home Equity — how much you can borrow against your home, and what it costs.
- Rent vs Buy — the full math: mortgage, PMI, appreciation, and opportunity cost.
Last updated: September 27, 2026