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Mortgage Refinance Calculator

See how much refinancing could save you.

How it is calculated

The tool compares the monthly payment of the loan at the old rate and at the new rate over the same term. For each rate the payment is PMT = B × r / (1 − (1 + r)−n), where B is the remaining balance, r is the annual rate divided by 12 and by 100, and n is the term in months. The saving is the old payment minus the new one. It uses one term for both loans, so shortening or extending the term changes the picture. Closing costs, fees and the loan interest paid over the whole life are not included, so a lower payment is not automatically a better deal.

Worked example

Balance $250,000, old rate 6.5%, new rate 5.25%, 360 months. Old payment: r = 0.065 / 12 = 0.005417, which gives $1,580.17. New payment: r = 0.004375, which gives $1,380.51. Monthly savings = 1,580.17 − 1,380.51 = $199.66. Divide the refinancing costs by 199.66 to see how many months it takes to recover them.

Try this example →

Common mistakes

  • Entering the rate as a monthly percentage instead of the annual rate; the tool divides by 12 itself.
  • Entering the original loan amount instead of the remaining balance.
  • Entering the years where months are expected; the term is in months (30 years = 360).
  • Ignoring closing costs and a restarted term, which can cancel out a lower monthly payment.

About this calculator

This calculator compares your current mortgage payment against a new one at a different rate, term, or loan amount, and factors in closing costs to show both the monthly savings and the break-even point — how many months it takes for those savings to cover the cost of refinancing.

Homeowners use it whenever mortgage rates drop or their credit improves, to see whether refinancing is genuinely worth the closing costs given how much longer they plan to stay in the home, rather than assuming a lower rate automatically means a better deal.

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