Refinance Calculator

When does refinancing make sense?

Refinancing replaces your current loan with a new one—ideally at a lower interest rate or better terms. Because refinancing has closing costs, you should know your break‑even point: how many months it takes for the lower monthly payment to recoup those costs.

Enter your current balance, rate, and remaining term, then model the new rate, term, and closing costs. The calculator shows break‑even months, monthly savings, and lifetime interest saved. If you won’t keep the loan past the break‑even date, refinancing may not be worthwhile.

Compare paying extra on your current loan with the Extra Payment calculator to see which path provides more value for your situation.

FAQs

Is a longer term always bad?

Longer terms can lower monthly payments but may increase total interest. If you refinance to a much lower rate and make extra payments, you can still finish early.

Do closing costs include points?

They can. Points are prepaid interest. Compare scenarios with and without points; the lowest APR often wins but consider your time horizon.

How much rate drop is “worth it”?

There’s no single threshold, but many borrowers look for a reduction of ~0.5–1.0 percentage point or more, depending on costs and how long they’ll keep the loan.

Chart

What this means