Refinance Calculator: Is Refinancing Worth It?

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Determine if refinancing your mortgage will save you money.

Quick Refinance Analysis

Step 1: Calculate Monthly Savings

Your Current Loan Your New Loan
Remaining balance: $_____ Same balance
Current rate: ____% New rate: ____%
Current payment: $_____ New payment: $_____
Monthly savings $_____

Step 2: Calculate Break-Even

Break-Even = Closing Costs ÷ Monthly Savings

Closing Costs Monthly Savings Break-Even
$3,000 $150 20 months
$4,000 $150 27 months
$5,000 $200 25 months
$6,000 $200 30 months
$8,000 $300 27 months
$10,000 $400 25 months

Refinance Savings Examples

Example 1: Rate Drop of 1%

Current: $300,000 at 7.50%, 27 years remaining

Scenario Current Refinance @ 6.50%
Rate 7.50% 6.50%
Monthly payment $2,098 $1,896
Monthly savings — $202
Closing costs — $6,000
Break-even — 30 months

If staying 30+ months: Refinance makes sense

Example 2: Rate Drop of 0.5%

Current: $350,000 at 7.25%, 25 years remaining

Scenario Current Refinance @ 6.75%
Rate 7.25% 6.75%
Monthly payment $2,387 $2,269
Monthly savings — $118
Closing costs — $6,500
Break-even — 55 months

If staying 55+ months: Worth considering

Example 3: Shortening Term

Current: $250,000 at 7.00%, 30-year, 25 years remaining

Scenario Current 30-yr New 15-yr @ 6.25%
Rate 7.00% 6.25%
Monthly payment $1,663 $2,142
Total interest remaining $248,900 $135,570
Interest savings — $113,330
Payoff 25 years 15 years

Higher payment but massive long-term savings

Payment Comparison Tables

$200,000 Balance

Rate 30-Year 20-Year 15-Year
6.00% $1,199 $1,432 $1,688
6.50% $1,264 $1,491 $1,742
7.00% $1,331 $1,551 $1,798
7.50% $1,398 $1,611 $1,854
8.00% $1,468 $1,673 $1,911

$300,000 Balance

Rate 30-Year 20-Year 15-Year
6.00% $1,799 $2,149 $2,532
6.50% $1,896 $2,236 $2,613
7.00% $1,996 $2,326 $2,696
7.50% $2,098 $2,417 $2,781
8.00% $2,201 $2,509 $2,867

$400,000 Balance

Rate 30-Year 20-Year 15-Year
6.00% $2,398 $2,865 $3,375
6.50% $2,528 $2,981 $3,484
7.00% $2,661 $3,101 $3,595
7.50% $2,797 $3,223 $3,708
8.00% $2,935 $3,346 $3,823

Total Interest Comparison

$300,000 Loan: 30-Year vs 15-Year

Rate 30-Year Interest 15-Year Interest Savings
6.00% $347,515 $155,683 $191,832
6.50% $382,633 $170,319 $212,314
7.00% $418,527 $185,302 $233,225
7.50% $455,169 $200,625 $254,544

Break-Even Calculator

Quick Break-Even Chart

Closing Costs Monthly Savings Needed to Break Even in:
12 mo
$3,000 $250
$4,500 $375
$6,000 $500
$8,000 $667
$10,000 $833

When Refinancing Makes Sense

Good Reasons to Refinance

Situation Benefit
Rate dropped 0.75%+ Lower payments & interest
Shorter term available Pay off faster
Remove PMI Eliminate insurance premium
ARM to fixed Rate stability
Cash-out for home improvement May be tax-deductible

Think Twice About Refinancing

Situation Why
Rate drop < 0.5% May not offset costs
Moving in 1-2 years Won’t break even
Resetting to 30 years Extends payoff date
High closing costs Longer break-even

Costs to Factor In

Cost Typical Range
Origination fee 0.5-1% of loan
Appraisal $400-$700
Title insurance $500-$1,500
Other closing costs $1,000-$3,000
Total typical 2-5% of loan

No-Closing-Cost Option

Feature Standard Refinance No Closing Cost
Closing costs $6,000 paid upfront $0 upfront
Interest rate 6.50% 6.875%
Monthly payment $1,896 $1,970
Better if staying 4+ years Under 3 years

Refinance Decision Flowchart

  1. Rate difference 0.75%+?

    • Yes → Continue
    • No → Probably not worth it

  2. Planning to stay past break-even?

    • Yes → Continue
    • No → Consider no-cost refinance or skip

  3. Can afford closing costs?

    • Yes → Standard refinance
    • No → Roll into loan or no-cost option

  4. Resetting term significantly?

    • No → Good to proceed
    • Yes, but much lower rate → May still save
    • Yes, similar rate → Reconsider

Total Cost Comparison

$300,000 current balance, choice to refinance or not:

Keep Current (7.50%, 25 years left)

Item Amount
Monthly payment $2,223
Total remaining payments $666,900
Total interest remaining $366,900

Refinance (6.50%, new 30-year)

Item Amount
Monthly payment $1,896
Total remaining payments $682,560
Total interest $382,560
Closing costs $6,000
Total cost $688,560

Lower payment but higher total cost (resetting to 30 years)

Refinance (6.50%, 20-year term)

Item Amount
Monthly payment $2,236
Total remaining payments $536,640
Total interest $236,640
Closing costs $6,000
Total cost $542,640

Lower total cost, similar payment, done sooner

Related: Cost to Refinance | Refinance Rates | Mortgage Payment Calculator

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