Refinance Savings Calculator

1. Enter your current balance, current rate and the years left on the loan. Your latest statement shows all three.
2. Enter the new rate, the new term and the closing costs from the lender offer. Choose whether you pay the costs at closing or add them to the new loan.
3. Set how many years you expect to keep the new loan, then read the savings, both break-even months and the lifetime numbers.

What each result tells you:

Refinance savings is the money you keep by replacing your current mortgage with a new loan at a lower rate or on a different term, after you pay the costs of the new loan. It has three layers: the change in the monthly payment, the time needed to earn back the closing costs, and the change in total interest.

The three layers often point in different directions. A new 30-year loan can cut the payment and still raise lifetime interest, because it adds years of payments. A 15-year loan can raise the payment and still save the most money. That is why this tool reports all three instead of the payment alone.

Refinance savings is not the same as the answer to "should I refinance". The decision also depends on your credit, your equity and your plans. For a yes-or-no view with fewer inputs, use the mortgage refinance calculator. This page goes deeper into where the savings come from.

The calculator prices both loans with the standard fixed-rate payment formula, then compares them month by month.

1. Current payment: your balance, current rate and months left go into the formula.
2. New payment: the balance (plus closing costs, if you add them to the loan), new rate and new term go into the formula.
3. Each month the tool adds up the payment savings and compares what you would still owe on each loan.
4. Net gain at any month = payment savings so far + (old loan balance - new loan balance) - costs paid at closing.
5. Lifetime difference = all remaining old payments - all new payments - costs paid at closing.

The balance step matters. A new loan with a longer term repays principal more slowly, so a lower payment is partly paid for by a higher balance. Counting the balance gap stops the tool from overstating savings when the term resets.

A homeowner owes 300,000 at 8.25 percent with 27 years left. A lender offers 7.03 percent on a new 30-year loan, the Freddie Mac average for the week of September 24, 2026, with 6,000 in closing costs paid at closing. They expect to stay 7 years.

Meaning: the refinance pays for itself in under two years and leaves the owner about 18,200 ahead after 7 years. The new term adds 36 months of payments, and that reset alone costs 50,245.79 in extra interest. Choosing a 27-year term at the same rate would raise the payment to 2,069.32 but cut lifetime interest to 370,458.19.

Five inputs decide whether a refinance saves money and how much.

Rate Gap

The difference between your current rate and the new rate drives the monthly savings. On a 300,000 balance, dropping from 8.25 to 7.03 percent with the same 27 years left saves 79,224.08 in interest. A small gap, such as 7.50 to 7.03 percent, saves only 136.65 a month on a new 30-year loan.

New Loan Term

Resetting to 30 years spreads the balance over more payments. It lowers the payment but adds interest. With the small 7.50 to 7.03 percent gap, the reset makes the full loan cost 8,133.46 more, even though the payment falls.

Closing Costs

Costs set the break-even point. Doubling costs doubles the simple break-even. Points are part of these costs; the mortgage points break-even calculator tests whether buying points is worth it on its own.

Paying Costs or Adding Them to the Loan

The CFPB explains that a no-closing-cost loan is paid for either with a higher rate or by adding the costs to the loan amount. Adding 6,000 to the example loan raises the new payment to 2,041.99 and moves the full break-even from month 20 to month 23.

How Long You Keep the Loan

Upfront costs only pay off over time. Selling or refinancing again before break-even turns the refinance into a loss.

The same balance and costs give very different results depending on the term you choose. All rows start from 300,000 at 8.25 percent with 27 years left and 6,000 paid at closing.

The 15-year loan raises the payment but wins on every other measure, because its lower rate and fast principal repayment build a large balance gap. It only works if the higher payment fits your budget. The 6.42 percent rate is the Freddie Mac 15-year average for the same week.

When Rates Fall Below Your Rate

Check the weekly survey averages against your note rate. When the gap looks meaningful, run your own balance and a real quote through the tool before you apply.

When Comparing Loan Estimates

Enter each offer with its own rate, term and total costs. The offer with the lowest payment is not always the one with the best net gain by the year you expect to move.

When Deciding on a Shorter Term

Test a 15 or 20-year term to see how much interest a higher payment removes. Then compare that with paying extra on your current loan using the mortgage payoff calculator, which has no closing costs.

1. Judging Only by the Monthly Payment

A lower payment can hide a higher lifetime cost when the term resets. Always read the lifetime cost difference too.

2. Leaving Out Some Costs

Points, appraisal, title and lender fees all count. Using a partial total makes the break-even look sooner than it is.

3. Treating Rolled-In Costs as Free

Costs added to the loan still cost money. They raise the balance and you pay interest on them for the whole term.

4. Using the Original Term Instead of Years Left

Enter the years remaining, not the original 30. Otherwise the current payment and interest are wrong.

5. Planning to Move Before Break-Even

Selling in year one of a refinance with a 20-month break-even loses money even at a lower rate.

6. Comparing Escrow Payments

Tax and insurance do not change with a refinance, so compare principal and interest only, as this tool does.

The payment and balance math follows the standard fixed-rate amortization formula, so results match a lender schedule to within cents of rounding. The limits come from what the tool leaves out.

Enough to recover your closing costs before you move or refinance again. With 6,000 in costs, saving 300 a month breaks even in month 20, while saving 100 a month takes 60 months.

It depends on your balance, costs and plans, not on a fixed rule. On a 300,000 balance a 1.22 point drop saves 311.88 a month; on a 100,000 balance the same drop saves about a third as much, so the same costs take three times as long to recover.

A new term restarts the payment clock. On a 300,000 balance, going from 7.50 percent with 28 years left to 7.03 percent over 30 years cuts the payment by 136.65 but adds 8,133.46 to the full cost of the loan.

The full break-even also counts how fast each loan pays down principal. A longer new term repays principal slowly, which delays it; a shorter term repays fast, which can bring it forward even when the payment rises.

Adding them saves cash today but raises the balance and the payment, and you pay interest on the costs for the life of the loan. The toggle in the tool shows both results side by side.

It usually saves the most interest, but the payment rises. On the 300,000 example the 15-year option at 6.42 percent costs 286.31 more a month and saves 275,655.90 over the loan.

No. Property tax and homeowners insurance depend on the home, not the loan, so this calculator compares principal and interest only. Your escrow account may be closed and reopened, which can change cash needed at closing.

Your monthly statement lists the unpaid principal balance and often the maturity date. Count the years from today to that date and enter them, using decimals for part years.

Freddie Mac publishes weekly average rates every Thursday in its Primary Mortgage Market Survey. Your own quote can be higher or lower depending on credit, equity and points.

No. The calculation runs in your browser and nothing is sent to our servers. Anything you choose to Save stays in this browser only.

• Data Spotlight: Trends in discount points amid rising interest rates (break-even period) (Consumer Financial Protection Bureau).
• Is there such a thing as a no-cost or no-closing cost loan or refinancing? (Consumer Financial Protection Bureau, Ask CFPB).
• Primary Mortgage Market Survey: weekly average mortgage rates (Freddie Mac, results as of September 24, 2026).
• Amortization Schedule (Corporate Finance Institute, payment and schedule formula).