Current Loan
Outstanding principal balance
Your current annual rate
Principal + interest only
Years left on current loan
New Loan
Rate you've been quoted
Typical range: 2–5% of loan
Extra cash from equity (0 if none)
Used to calculate break-even
Monthly Savings
+$201
per month
Lifetime Savings
-$56,575
vs. keeping current loan
Savings Over 7yr Stay
$10,871
after closing costs
Current Remaining Total
$614,400
principal + interest
Current Remaining Interest
$314,400
estimated interest left
New Total Interest
$364,975
over new loan term
Break-Even
30 mo
months to recoup costs
Recommendation
Refinance Makes SenseYou'd save $201/month and break even on closing costs in 30 months. Since you plan to stay 7 years (84 months), you'll recoup your closing costs and save $10,871 over your planned stay.
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How to Use This Refinance Calculator
What is mortgage refinancing?
Refinancing replaces your existing mortgage with a new loan — typically to get a lower interest rate, reduce your monthly payment, change your loan term, or access home equity through a cash-out refinance.
Understanding break-even
The break-even point tells you how many months it takes for your monthly savings to cover the upfront closing costs. If you plan to stay in your home longer than the break-even period, refinancing is generally worthwhile.
What are closing costs?
Closing costs typically range from 2–5% of the loan amount and include lender fees, appraisal, title insurance, and prepaid items. Some lenders offer no-closing-cost refinances, but these usually come with a slightly higher rate.
Rate reduction rule of thumb
A common guideline is to refinance when you can lower your rate by at least 0.5–1%. However, the break-even analysis is more accurate — a small rate drop on a large balance can still produce significant savings.
Shorter term vs. lower payment
Refinancing to a 15-year loan typically means a higher monthly payment but dramatically less total interest paid. Refinancing to a 30-year loan lowers your payment but resets the clock and may cost more in total interest.
Cash-out refinancing
A cash-out refinance lets you borrow against your home equity. The extra amount is added to your loan balance, increasing your payment. It can be a cost-effective way to fund renovations or consolidate high-interest debt.
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