How to Use Our Refinance Calculator

Should you refinance? Use our calculator to find out in 60 seconds.

Here's how to use it (and how to interpret the results).

What the Refinance Calculator Shows You

Our calculator tells you:

1. New monthly payment (principal + interest)
2. Monthly savings (compared to your current payment)
3. Total interest saved (over the life of the loan)
4. Break-even point (how long until you recover closing costs)
5. Total cost comparison (current loan vs new loan over different timeframes)

Why this matters: You need to know if refinancing saves you money AND how long you need to stay in the home to benefit.

Use the refinance calculator →

Step-by-Step: How to Use the Calculator

Step 1: Enter Your Current Loan Info

Current Loan Balance

• Look at your most recent mortgage statement
• Enter the remaining balance (not the original loan amount)

Example: You borrowed $400,000 five years ago. Today you owe $365,000. Enter $365,000.

Current Interest Rate

• Check your mortgage statement or loan documents
• Enter the rate as a percentage (e.g., 7.25)

Remaining Loan Term

• How many years are left on your current loan?
• If you have a 30-year mortgage and you're 5 years in, you have 25 years remaining

Broker's Tip: If you don't know your remaining term, use your mortgage statement. Look for "maturity date" and calculate how many years from now that is.

Step 2: Enter Your New Loan Info

New Loan Amount

• Usually the same as your current balance (for rate-and-term refinance)
• If you're doing cash-out, add the cash you're taking out
• Example: Current balance $365,000 + $50,000 cash out = $415,000 new loan

New Interest Rate

• Enter the rate you've been quoted (or use current market rates as a benchmark)
• March 2026 average: 6.0-6.5% for well-qualified borrowers

Not sure what rate you qualify for? Get a personalized quote →

New Loan Term

• 30 years: Lower payment, more interest
• 15 years: Higher payment, less interest, own your home sooner
• 20 years: Middle ground

See our 15 vs 30-year comparison.

Step 3: Enter Closing Costs

Estimated Closing Costs

• Typical range: $3,000-$6,000
• Includes: origination fee, appraisal, title insurance, lender fees

Not sure what your closing costs are? Lenders are required to give you a Loan Estimate within 3 days of applying. Use that number.

If you haven't applied yet, estimate:

• $4,000 for loans under $300,000
• $5,000 for loans $300,000-$500,000
• $6,000 for loans over $500,000

See our closing costs guide.

Broker's Tip: Don't guess on closing costs. Get a real Loan Estimate from your lender. Estimates that are too low will give you false break-even numbers.

Step 4: Review the Results

The calculator shows you:

1. New Monthly Payment

• Your new principal + interest payment
• Does NOT include: property taxes, insurance, HOA (those stay the same)

2. Monthly Savings

• How much less you'll pay each month
• Example: $2,730 (current) vs $2,463 (new) = $267/month savings

3. Break-Even Point

• How many months until you recover closing costs through monthly savings
• Formula: Closing costs ÷ monthly savings = break-even months
• Example: $5,000 ÷ $267 = 19 months

If you're staying 19+ months, refinancing makes sense.

4. Total Interest Saved

• How much interest you'll save over the life of the loan
• Example: $328,000 (current loan) vs $287,000 (new loan) = $41,000 saved

5. Total Cost Over Time

• Shows total cost (payments + closing costs) at 3 years, 5 years, 10 years
• Helps you decide if you should refinance based on how long you'll stay

How to Interpret the Results

Scenario 1: Clear Winner

Results:

• Monthly savings: $280
• Break-even: 18 months
• Planning to stay: 7+ years

Decision: REFINANCE. You'll recover costs in 1.5 years and save $280/month after that.

Scenario 2: Borderline

Results:

• Monthly savings: $95
• Break-even: 48 months
• Planning to stay: 5 years

Decision: MAYBE. You'll barely recover costs. Only refinance if you're certain you'll stay 5+ years.

Scenario 3: Don't Do It

Results:

• Monthly savings: $150
• Break-even: 36 months
• Planning to stay: 2 years

Decision: DON'T REFINANCE. You'll sell before recovering closing costs. You'll lose money.

Broker's Tip: I tell clients to aim for a break-even of 24 months or less. Anything longer is risky (you might move, rates might drop further, life happens).

Advanced Calculator Features

Cash-Out Refinance Mode

How to use:

1. Enter your current loan balance: $350,000
2. Enter new loan amount: $400,000 (you're taking $50,000 cash)
3. Compare the payment increase vs the cash you're getting

Use case: Debt consolidation, home improvements, buying investment property.

See our cash-out refinance guide.

Comparing 15-Year vs 30-Year

Run the calculator twice:

1. First: New loan = 30 years
2. Second: New loan = 15 years

Compare:

• Monthly payment difference
• Total interest paid
• Payoff timeline

Example:

• 30-year: $2,463/month, $287,000 interest
• 15-year: $3,140/month, $165,000 interest

You save $122,000 in interest but pay $677/month more. Can you afford it?

No-Closing-Cost Refinance Comparison

Scenario A: Pay closing costs upfront

• Rate: 6.00%
• Closing costs: $5,000
• Monthly payment: $2,398

Scenario B: No-cost refinance (higher rate)

• Rate: 6.375%
• Closing costs: $0
• Monthly payment: $2,494

Run both through the calculator. Compare total cost over 3, 5, and 10 years.

See our no-closing-cost guide.

Common Calculator Mistakes

Mistake #1: Using the Original Loan Amount Instead of Current Balance

Your mortgage statement shows remaining balance, not original loan amount. Use the remaining balance.

Mistake #2: Forgetting to Include Cash-Out

If you're taking cash out, add it to your current balance. $350,000 balance + $50,000 cash = $400,000 new loan.

Mistake #3: Underestimating Closing Costs

"Free refinance" offers aren't free. Either you're paying a higher rate OR you're rolling costs into the loan. Account for this.

Mistake #4: Ignoring PMI

If your current loan has PMI and your new loan drops it (because you hit 20% equity), factor that into your monthly savings.

Example:

• Current payment: $2,200 + $150 PMI = $2,350
• New payment: $2,150 + $0 PMI = $2,150
• Real savings: $200/month, not just the principal/interest difference

Mistake #5: Not Adjusting for Loan Term

Refinancing from a 25-year remaining term to a 30-year term lowers your payment but you're restarting the clock. You'll pay more interest long-term.

Real-World Example: Full Walkthrough

Your situation:

• Current balance: $380,000
• Current rate: 7.25%
• Remaining term: 27 years
• Current payment: $2,593/month

Refinance offer:

• New loan: $380,000
• New rate: 6.25%
• New term: 30 years
• Closing costs: $5,200

Calculator results:

• New payment: $2,339/month
• Monthly savings: $254
• Break-even: 20.5 months (1.7 years)
• Total interest saved (over 30 years): $76,000

Decision:

• You're staying at least 3 years → REFINANCE
• You'll recover costs in under 2 years and save $254/month after that

Total cost comparison (if you stay 5 years):

• Keep current loan: $155,580 in payments
• Refinance: $140,340 in payments + $5,200 costs = $145,540
• Net savings: $10,040

Frequently Asked Questions

Q: Does the calculator include property taxes and insurance?

No. The calculator shows principal + interest only. Taxes and insurance stay the same whether you refinance or not.

Q: Can I use the calculator for ARM loans?

The calculator assumes fixed rates. For ARMs, you'd need to estimate where your rate will adjust to over time (complicated). Stick to fixed-rate scenarios.

Q: What if I don't know my closing costs?

Use $5,000 as a baseline for a $400,000 loan. Get a real Loan Estimate from your lender for accuracy.

Q: Can I calculate cash-out refinance?

Yes. Enter your current balance, then enter a higher new loan amount (current balance + cash you're taking).

Q: How accurate is the calculator?

Very accurate for principal + interest. But it doesn't include:

• PMI (add this manually if applicable)
• Taxes/insurance (these don't change)
• Rate changes (if you're comparing fixed to ARM)

Next Steps

Ready to run the numbers? Use our calculator now:

Calculate your refinance savings →

Want a personalized analysis? I'll run the numbers for your specific situation:

Get your free quote →

I'm a California licensed mortgage broker with 15+ years experience (DRE #01212512).

Related guides:

• Break-Even Calculator Guide
• Cash-Out Calculator Guide
• Refinance Savings Examples
• Should I Refinance?
• Current Refinance Rates