Calculate mortgage refinance savings, break-even point, and lifetime cost comparison. Includes rate sensitivity, cash-out analysis, and balance projection.
Refinancing replaces your existing mortgage with a new loan. The core question is whether the lower payment or different term justifies the new closing costs and any reset of the amortization schedule.
This calculator compares the current and proposed loan structures, estimates the monthly savings, and calculates a break-even point based on the closing costs you enter. It also shows how changing the new rate changes the payoff economics.
The result is a refinance worksheet, not a lender quote. Final costs depend on the actual Loan Estimate, rate lock, term, and whether the refinance rolls fees or cash-out proceeds into the new balance.
Refinancing only works when the savings survive the closing costs and any longer term. This calculator quantifies break-even, lifetime savings, and balance trajectory so you can decide with the full cost picture.
Monthly Savings = Current Payment − New Payment. Break-Even = Closing Costs / Monthly Savings (months). Lifetime Savings = (Current Total Cost) − (New Total Cost). New Loan Balance = Current Balance + Closing Costs + Cash-Out.
Result: Monthly savings: $429 — Break-even: 14 months — Lifetime savings: $72,980
Refinancing from 7.0% to 5.5% saves $429/month. With $6,000 in closing costs, break-even is reached in just 14 months. Over the full loan life, total savings are $72,980. The verdict: clearly favorable if you plan to stay in the home beyond 14 months.
Compare the new payment against closing costs, the remaining term, and any cash-out amount before deciding whether the refi actually improves your position.
A short break-even period only matters if you plan to stay in the home long enough to capture it. Avoid extending the term unless the lower monthly payment is the main goal and the lifetime cost still makes sense.
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This worksheet compares the current loan's payment path with a replacement loan using the new rate, term, closing costs, and optional cash-out amount entered by the user. It calculates monthly payment differences, a simple break-even period, and total cost comparisons under those assumptions.
It is a scenario model, not a refinancing recommendation. The actual decision depends on the lender's Loan Estimate, how fees are financed, how long you expect to keep the loan, and whether the new loan changes the risk profile of the debt.
The key test is whether the payment savings, loan structure, and break-even period fit how long you expect to keep the new loan. Rate reduction matters, but so do closing costs, term reset, cash-out, and whether the refinance changes the risk of the debt.
Closing costs typically range from 2-5% of the loan amount. For a $300K loan, expect $6K-$15K. This includes appraisal ($300-600), title insurance, origination fees, credit report, recording fees, and other charges. Some lenders offer "no-cost" refinancing by rolling costs into the rate.
If you refinance into a new 30-year loan, yes — the amortization resets. This means more total interest even at a lower rate. To avoid this, refinance into a shorter term (20 or 15 years) or continue making your old payment amount on the new loan to pay it off faster.
Refinancing causes a temporary credit score dip (5-10 points) from the hard inquiry and new account. Your score typically recovers within 3-6 months. If you apply to multiple lenders within a 14-45 day window, credit bureaus count it as a single inquiry for scoring purposes.
Only if the use of funds generates a return higher than the mortgage rate (e.g., debt consolidation from 20%+ credit cards) or is truly necessary (home repairs, education). Using home equity for discretionary spending is risky. The calculator shows the additional cost of cash-out versus a standard refinance.
Typically 30-45 days from application to closing. The process includes application, credit/income verification, appraisal, underwriting, and closing. Rate locks are usually available for 30-60 days. Some lenders offer streamlined refinancing (like FHA Streamline) that can close in 2-3 weeks.