When should I refinance my mortgage?

The traditional rule of thumb is when you can lower your rate by at least 0.75–1.0 percentage point, but the real answer depends on your break-even period — how many months it takes for monthly savings to recoup closing costs. If you plan to stay in the home beyond the break-even point, refinancing likely makes sense. This calculator shows your exact break-even timeline.

How much does it cost to refinance a mortgage?

Refinancing closing costs typically range from 2% to 5% of the loan amount, including appraisal fees, title insurance, origination fees, and other charges. On a $300,000 loan, expect $6,000 to $15,000. Some lenders offer "no-closing-cost" refinances, but they compensate by charging a slightly higher interest rate.

Home & Mortgage

Will Refinancing Your Mortgage Save Money?

Compare your current mortgage against a refinance to see monthly savings, the break-even point, and total interest saved.

Current Monthly Payment

—

New Monthly Payment

—

Est. Interest Saved

—

Break-Even

—

Current Mortgage

Current Loan Balance

Current Rate

Remaining Term

Refinance Options

New Interest Rate

New Loan Term

Closing Costs

Estimated Monthly Savings

$419/mo

Estimated break-even in

17months

~1.4 years

Cumulative Interest Comparison

Compares total interest paid over time. The refi line includes closing costs. Where the lines cross is the estimated break-even point.

Current Mortgage

Original Loan Amount

Origination Month

Year

Original Term

yrs

Interest Rate

Refinance Options

Refi Start Month

Year

Additional Loan Amount (Cash Out)

New Term

yrs

New Rate

Closing Costs

Estimated closing costs: $11,467

Estimated Net Savings with Refinance

$5,509

Interest savings minus closing costs over the remaining loan term

Estimated break-even in

30months

Remaining Balance

Shows remaining principal balance on each loan over time. The refinanced balance may start higher due to rolled-in closing costs.

Side-by-Side Comparison

Metric	Current	Refinance	Difference
Monthly Payment	$2,796.86	$2,353.48	-$443
Remaining Payments	309	360	+51
Total Interest	$481,995	$465,019	-$16,976
Closing Costs	—	$11,467	+$11,467
Total Cost (Interest + Closing)	$481,995	$858,720	+$376,725
New Loan Amount	—	$382,234	—

About This Analysis

This calculator provides estimates based on the inputs you supply. It assumes fixed interest rates, standard amortization, and that closing costs are rolled into the new loan balance. It does not account for taxes, insurance, PMI changes, prepayment penalties, or the opportunity cost of closing-cost funds. Results are for informational and educational purposes only and should not be considered financial advice. Consult a qualified professional before making refinancing decisions.

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Will Refinancing Your Mortgage Save Money?

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