Free Mortgage Refinance Calculator

A refinance pays off your existing mortgage with a brand new loan, typically at a lower interest rate or a different term. You still owe principal, but the new loan recalculates your monthly payment based on the new rate, the new balance, and the new term. This calculator models the two most common goals: a rate-and-term refinance, which lowers your rate and/or shortens your term without taking cash out, and a cash-out refinance, which increases your balance to access home equity.

The core tradeoff is simple: a lower rate usually means a lower payment and less lifetime interest, but you pay closing costs to get there, and you may be resetting a partially-paid-off loan back to a full new term. The goal is to make sure the savings outweigh the costs within the time you plan to keep the home.

Your break-even point is how many months it takes your monthly savings to cover the total refinance cost. Divide your net closing costs by your monthly payment savings. For example, if refinancing costs $6,000 and saves you $250 per month, your break-even is 24 months.

If you plan to move or pay off the loan before the break-even point, the refinance loses money on a cash-flow basis. This calculator flags when your break-even exceeds your expected time in the home and projects your net savings at 3, 5, 7, and 10 years so you can see the payoff horizon clearly.

A rate-and-term refinance replaces your loan at a lower rate or shorter term without changing how much you owe. This is the purest comparison in the calculator above: the new balance equals the current balance (plus any financed closing costs), so any savings come from the rate or term change.

A cash-out refinance adds equity you have built to the loan balance and hands you the difference in cash. Your payment can rise even at a lower rate because you are borrowing more. Cash-out refinancing makes the most sense when your current rate is close to market rates. If you already hold a very low rate, borrowing against equity with a second lien often beats a cash-out refi because it preserves your low first-mortgage rate. See our HELOC vs. Cash-Out Refinance calculator for the side-by-side comparison.

Refinancing is not the only way to reduce your payment or interest. A mortgage recast applies a lump sum to principal and re-amortizes your remaining balance over the original term, permanently lowering your payment while keeping your current rate for a fee of roughly $150 to $500. Making extra principal payments shortens your term and saves interest without changing your required payment.

• Refinance wins when market rates are meaningfully below your current rate and you can recoup closing costs before you move.
• Recast wins when you have a lump sum, already hold a good rate, and want lower monthly overhead without resetting your term or paying full closing costs.
• Extra payments win when your goal is paying off early and saving interest rather than changing your required payment.

Enter your current mortgage balance, interest rate, and remaining term, then set the new loan's rate, term, and expected closing costs. The results instantly show:

• Your current and new principal & interest payments and the monthly difference
• Your net refinance cost and break-even point (in months and calendar date)
• A side-by-side curve of your balance over time under both loans
• Interest paid by each loan over the same period and your net savings at 3, 5, 7, and 10 years

Use the Share button in the header to copy a link to your exact scenario, and Download CSV to export the full side-by-side schedule for your records. All calculations run in your browser, so no loan data leaves your device.

Both loans use the standard amortization formula M = P[r(1+r)^n]/[(1+r)^n - 1], where P is the loan balance, r is the monthly rate, and n is the number of payments. The current payment is amortized over your remaining term (or your override, if provided). Monthly savings are the current payment minus the new payment. Break-even is net closing costs divided by monthly savings. Interest comparison is done over the current loan's remaining term so you compare each loan over the same window instead of comparing a partially-paid loan to a full new term.

Closing costs are estimates. Typical rate-and-term refinance closing costs run 2% to 4% of the loan amount. Always request an official Loan Estimate from your lender before deciding, and confirm any prepayment penalties on your current loan.

Consumer reference: CFPB Loan Estimate guide. Your lender’s official disclosure controls the actual costs.