Refinance Savings Calculator
Refinancing replaces your existing loan with a new one, often at a lower rate or different term. This calculator compares your current payment to a new payment so you can see your monthly and lifetime savings.
How it works
This calculator uses the standard amortized loan payment formula: M = P·r / (1 − (1 + r)^−n), where P is the loan balance, r is the monthly interest rate (annual rate ÷ 12), and n is the number of payments (years × 12).
It computes your current monthly payment and the new payment at the refinance rate, then subtracts the two to find your monthly savings. Lifetime savings compares total payments over the full term, including closing costs added to the new loan.
The break-even point shows how many months it takes for your monthly savings to cover your closing costs — useful for deciding whether refinancing is worth it.
Tips
A lower rate isn't always cheaper if you extend the term — a longer loan can raise total interest even with smaller monthly payments.
Compare the break-even point to how long you plan to stay in the home. If you'll move before breaking even, refinancing may cost more than it saves.
FAQ
What is the break-even point?
It's the number of months it takes for your monthly savings to repay the closing costs. If you sell or refinance again before that point, you won't recoup the fees.
Why does lifetime savings sometimes go negative?
If your new loan has a longer term, you may pay more total interest even at a lower rate. The calculator includes closing costs, so a small rate drop on a longer term can erase savings.
Are taxes and insurance included?
No. This tool only compares principal and interest payments. Escrow items like property taxes and insurance are separate and don't change with a refinance.