Mortgage Refinance Savings Calculator
Determine if refinancing your home loan will save you money over time.
Current Monthly Payment (P&I):
$0.00
New Monthly Payment (P&I):
$0.00
Monthly Savings:
$0.00
Break-Even Point:
0 months
Total Interest Savings (Life of Loan):
$0.00
How to Use the Mortgage Refinance Calculator
Refinancing a mortgage involves replacing your existing home loan with a new one, typically to take advantage of lower interest rates or to change the loan term. This calculator helps you determine if the upfront closing costs are worth the long-term savings.
Understanding the Break-Even Point
The break-even point is the most critical metric in refinancing. It represents the number of months it takes for your monthly savings to "pay back" the closing costs of the new loan. For example, if your closing costs are $5,000 and you save $200 per month, your break-even point is 25 months. If you plan to sell the home before reaching the break-even point, refinancing might not be financially beneficial.
Refinance Example Comparison
| Scenario | Interest Rate | Monthly Payment | Savings |
|---|---|---|---|
| Original Loan | 6.5% | $1,896 | – |
| Refinanced Loan | 5.0% | $1,610 | $286/mo |
When Should You Consider Refinancing?
- Interest Rates Drop: A general rule of thumb is that if rates drop by 0.75% to 1%, refinancing is worth investigating.
- Improved Credit Score: If your credit score has increased significantly since you first took out the loan, you may qualify for much lower rates.
- Change in Term: Switching from a 30-year to a 15-year mortgage can save you tens of thousands in interest, though your monthly payment will likely increase.
- Switching from ARM to Fixed: If you have an Adjustable-Rate Mortgage and want the stability of a Fixed-Rate Mortgage.