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How to use the Refinance Calculator
- 1Enter your current balance, interest rate and years left.
- 2Enter the new rate, term and closing costs.
- 3Compare the monthly savings, break-even time and total interest.
When does refinancing make sense?
The key number is the break-even point: closing costs divided by the monthly savings. If refinancing costs $6,000 and saves $250 a month, you break even after 24 months. If you plan to stay in the home longer than that, refinancing usually pays off.
Watch the term. Restarting a 30-year loan when you have 25 years left lowers the payment partly by stretching the debt, which can increase the total interest you pay even at a lower rate. Refinancing into a 15- or 20-year loan, or keeping your payment the same, avoids that.
Rate-and-term vs cash-out
A rate-and-term refinance replaces your loan with a cheaper one. A cash-out refinance borrows more than you owe and pays you the difference, which is useful for renovations or expensive debt, but it increases your balance and usually comes with a slightly higher rate.
Sources & review
Figures last checked in October 2026 against the official sources below. Standard amortization; break-even = closing costs ÷ monthly savings.
Results are estimates for general information, not financial, tax or legal advice. How we check our tools
Frequently asked questions
How much lower does my rate need to be to refinance?
There's no fixed rule; what matters is how quickly the savings cover the closing costs. A drop of 0.75–1 percentage point often breaks even within two to three years on a typical loan.
What are typical refinance closing costs?
Usually 2–5% of the loan amount, covering the lender's fees, appraisal, title insurance and recording fees. Some lenders offer no-closing-cost loans with a higher rate instead.
Does refinancing hurt my credit?
The lender's hard credit check can lower your score by a few points for a short time. Rate shopping within a short window (typically 14–45 days) counts as a single inquiry.