Calculate your monthly savings and break-even point
30 Years
20 Years
15 Years
10 Years
New Monthly Payment$0.00
Monthly Savings$0.00
Total Interest Saved$0.00
Break-even Point0 Months
function calculateRefinance() {
var balance = parseFloat(document.getElementById('loanBalance').value);
var currentPayment = parseFloat(document.getElementById('currentPayment').value);
var newRate = parseFloat(document.getElementById('newRate').value);
var termYears = parseInt(document.getElementById('loanTerm').value);
var closingCosts = parseFloat(document.getElementById('closingCosts').value);
if (isNaN(balance) || isNaN(currentPayment) || isNaN(newRate) || isNaN(closingCosts)) {
alert("Please enter valid numeric values in all fields.");
return;
}
// Monthly interest rate
var r = (newRate / 100) / 12;
// Number of months
var n = termYears * 12;
// Monthly Payment Formula: P [ r(1 + r)^n ] / [ (1 + r)^n – 1 ]
var newPayment = balance * (r * Math.pow(1 + r, n)) / (Math.pow(1 + r, n) – 1);
var monthlySavings = currentPayment – newPayment;
var totalNewInterest = (newPayment * n) – balance;
// Note: Total interest saved is complex without knowing the original loan start date,
// so we calculate based on the remaining term vs new term.
// For a simplified high-SEO calculator, we focus on the break-even and monthly cash flow.
var breakEvenMonths = closingCosts / monthlySavings;
document.getElementById('newMonthlyDisplay').innerText = "$" + newPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('monthlySavingsDisplay').innerText = "$" + monthlySavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Lifetime savings based on the new term
var lifetimeSavings = (monthlySavings * n) – closingCosts;
document.getElementById('totalInterestDisplay').innerText = "$" + (lifetimeSavings > 0 ? lifetimeSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) : "0.00");
if (monthlySavings > 0) {
document.getElementById('breakevenDisplay').innerText = Math.ceil(breakEvenMonths) + " Months";
document.getElementById('analysisMessage').innerText = "Refinancing will save you money monthly. You will recover your closing costs in " + Math.ceil(breakEvenMonths) + " months.";
} else {
document.getElementById('breakevenDisplay').innerText = "Never";
document.getElementById('analysisMessage').innerText = "Warning: Your new monthly payment is higher than your current payment. Refinancing may not be beneficial unless you are significantly shortening your term.";
}
document.getElementById('refiResults').style.display = 'block';
}
How to Use the Mortgage Refinance Calculator
Deciding whether to refinance your home is a major financial decision. Our Mortgage Refinance Savings Calculator is designed to help you determine if the numbers make sense. By comparing your current monthly principal and interest payment against a new loan structure, you can see exactly how much you stand to save—and how long it will take to break even on closing costs.
Understanding the Key Metrics
Remaining Loan Balance: This is the current amount you owe your lender, which can usually be found on your latest mortgage statement.
Current Monthly Payment: Enter only the Principal and Interest (P&I) portion of your payment. Do not include taxes or insurance (escrow), as those typically remain the same regardless of your interest rate.
Closing Costs: Refinancing isn't free. Expect to pay between 2% and 5% of the loan amount in fees (appraisal, title insurance, origination fees).
Break-even Point: This is the most critical number. It tells you how many months you need to stay in the home to "earn back" the money you spent on closing costs through your monthly savings.
A Realistic Refinance Example
Imagine you have a $300,000 balance on a mortgage with a 6.5% interest rate. Your current P&I payment is roughly $1,896. If you refinance into a new 30-year loan at 4.5% with $5,000 in closing costs:
New Monthly Payment: $1,520
Monthly Savings: $376
Break-even Point: 14 Months ($5,000 / $376)
In this scenario, if you plan to live in the home for more than 14 months, refinancing is a highly profitable move.
When Does Refinancing Make Sense?
Generally, experts suggest that if you can lower your interest rate by at least 0.75% to 1%, it is worth looking into. However, the "Break-even Point" is the ultimate decider. If you plan to sell the home in two years but your break-even point is three years away, you will actually lose money by refinancing.
Common Refinance Strategies
Rate-and-Term Refinance: The most common type, used to lower the interest rate or change the length of the loan (e.g., switching from a 30-year to a 15-year mortgage).
Cash-Out Refinance: Taking out a loan for more than you owe and pocketing the difference in cash for home improvements or debt consolidation.
ARM to Fixed: Switching from an Adjustable-Rate Mortgage (ARM) to a Fixed-Rate mortgage to ensure long-term payment stability.