Check if a mortgage refinance pays off. Enter balance, new terms and closing costs to see the new payment, interest saved, and break-even month.
All calculations happen locally in your browser. Nothing leaves your device.
The tool prices both loans with the standard fixed-payment formula M = P × r × (1+r)ⁿ / ((1+r)ⁿ − 1): your remaining balance at the current rate and term versus the same balance at the new rate and term. It then compares the two monthly payments, the total interest over the life of each loan, and how long it takes for the monthly savings to repay the one-time refinance fees.
Both the current and the new payment use the standard fixed-payment (equal principal and interest) formula: M = P × r × (1+r)ⁿ / ((1+r)ⁿ − 1), where P is the loan balance, r is the monthly rate (annual rate ÷ 12 ÷ 100) and n is the number of monthly payments. The new payment applies your remaining balance to the new rate and new term.
Refinancing costs money up front (closing costs, appraisal, points). The break-even month is the first month at which the cumulative interest savings from the lower payment exceed those one-time fees. Before that month you are behind; after it you are ahead. If the savings never cover the fees within the new term, the refinance is not worth it.
Refinancing usually pays off when (1) you keep the loan for longer than the break-even period, (2) the rate drop is large enough that the interest saved exceeds the closing costs, and (3) you are not extending the term so much that the extra months cost more interest than you save. A common rule of thumb is a drop of at least about 0.75 percentage points.
A shorter new term raises the monthly payment but sharply cuts total interest, often making the refinance clearly worthwhile. A longer new term lowers the payment but can cost more total interest than staying put — which is why the tool compares total interest, not just the monthly payment.
This is an estimate, not a quote. Real refinance offers include lender-specific fees, escrow, rate-lock terms and taxes that this simplified model ignores. The monthly payment formula is standard and exact for fully amortizing loans, but treat the numbers as a planning tool and compare them against an actual lender offer before deciding.
If you just finished with Mortgage Refinance Calculator, the natural next steps are Cross-border Mortgage, Loan Prepayment Calculator, EMI Loan Calculator, or browse every tool in Cross-border Finance.