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Refinance Calculator

See if refinancing will save you money.

01

Current loan

Pick the path that matches what you know: payoff figures from your statement, or original loan amount and amortization terms.

Describe the loan
$
%
$

Use the principal-and-interest part of your mortgage payment, not taxes, insurance, or HOA. We derive months remaining from balance, rate, and this payment (fixed-rate amortization).

Enter your actual monthly payment (principal and interest) for the best estimate. With $0 here we use a placeholder timeline (~360 mo) to illustrate numbers, add your real payment for an accurate payoff estimate.

02

New loan terms

%

2026: roughly 5.5%–6.2% typical, verify with quotes.

$

Third-party + lender fees (typ. $2k–$5k). Paid at closing unless you roll them into the loan below.

%

Common on refinance quotes (e.g. 2% ≈ two points on the loan amount). Cash at closing unless rolled in.

$

Adds to new loan principal.

Monthly savings
$322.12
Break-even10 mo
New monthly payment$2,053.64
Lifetime interest change$115,964.32

Scorecard

Break-even viewStrongly Recommended
Net lifetime benefit$112,964.32
Cash closing (fees + points)$3,000.00
New loan principal$350,000.00

Break-even vs 60 mo

10 mo

At this pace of monthly savings, closing costs are covered after about 10 months.

03

Loan comparison

Principal
Current
$350,000.00
New loan
$350,000.00
Difference
$0.00
Monthly payment
Current
$2,375.76
New loan
$2,053.64
Difference
-$322.12
Time to pay off
Current
360 mo
New loan
360 mo
Difference
–
Interest rate
Current
7.20%
New loan
5.80%
Difference
-1.40%
Est. APR (cash closing)

Incl. points & fees paid upfront

Current
–
New loan
5.880%
Difference
–
Total payments over loan
Current
$855,273.14
New loan
$739,308.83
Difference
-$115,964.32
Total interest
Current
$505,273.14
New loan
$389,308.83
Difference
$115,964.32
Cash closing
Current
–
New loan
$3,000.00
Difference
–

Interest rate here is the contract rate used for your monthly principal-and-interest payment on the new loan amount. Lenders often quote a higher APR on the new loan because APR reflects prepaid finance charges (points and many closing costs), not because your monthly payment is calculated with a different rate. Our Est. APR approximates that when you pay closing costs out of pocket (not rolled into the loan). The APR on your Loan Estimate can still differ slightly. Totals above use the interest-rate scenario for payments (principal and interest only).

Refinance Strategy 2026: When the Numbers Actually Work

The break-even formula Break-Even=Closing CostsMonthly Savings\text{Break-Even} = \frac{\text{Closing Costs}}{\text{Monthly Savings}} tells you how many months until refinancing pays for itself. Run your numbers here, then use these insights to avoid the pitfalls lenders rarely mention.

Strategic Refinance Insights

The 24-Month Litmus Test

Break-even under 24 months usually pencils out, you recoup costs fast.
Past 48 months, you're betting rates stay favorable and you don't sell. Life happens. Rate swings happen. If break-even stretches beyond 4 years, think hard before committing.

The Clock Reset Trap

Refinancing at year 10 into a new 30-year loan tacks 10 extra years onto your debt.
Even with a lower rate, you're restarting the interest-heavy front of amortization. A 15- or 20-year term that lines up with your remaining payoff often saves more in the long run.

Cash-Out: When It Makes Sense

Pulling equity increases your loan amount and can bump you into PMI or higher LTV tiers.
Worth it if the use, home improvement, high-interest debt payoff, beats the added interest cost. Run the numbers before you take the cash.

Beyond the Old 1% Rule

The 'refinance when rates drop 1%' rule came from a different era.
With 2026 rates in the 5.5–6.2% range, a 0.5% drop can still work if closing costs stay low and break-even lands under 2 years. The rate gap matters less than the math.

Points: Do Your Own Break-Even

One point costs 1% of the loan and typically cuts your rate by about 0.25%.
Run the point break-even separately from the refinance break-even. If you sell or refinance again before that date, you overpaid.

15-Year vs 30-Year: The Real Trade-Off

Shorter terms save a lot in interest and build equity faster, if you can swing the payment.
A 30-year with extra principal when you can afford it offers flexibility without locking in higher minimums. Pick based on your cash flow, not dogma.

Refinance Calculator: Master Break-Even Analysis in 2026

Calculate mortgage refinance break-even point, monthly savings, and total interest comparison. How to calculate refinance break-even. Determine if refinancing saves money. No sign-up, all calculations run locally.

What This Calculator Does

This refinance calculator compares your current mortgage against a proposed new loan to determine whether refinancing saves money. It computes the break-even point—how many months until monthly savings recoup closing costs—along with monthly payment reduction, total interest comparison, and net lifetime benefit. If the new term extends your debt timeline, the calculator flags the clock-reset risk so you can weigh lower payments against additional years of interest.
  • Who It Helps:
    Homeowners considering a rate-and-term refinance, borrowers evaluating cash-out refinancing, and anyone comparing no-cost refinance offers against traditional closing-cost structures.
  • Key Outputs:
    Break-even point in months (with risk classification: under 24 months, 24–48 months, or over 48 months), monthly payment savings, total interest remaining on each loan, net lifetime benefit after closing costs, and a clock-reset warning when applicable.
  • What It Does Not Do:
    The calculator does not pull live mortgage rates, factor in tax deductions on mortgage interest, or model adjustable-rate scenarios. It assumes fixed-rate loans with standard monthly amortization.

How the Math Works

The calculator uses the standard amortization formula to compute monthly payments for both the current and proposed loans, then derives savings and break-even from the difference:
PMT=L×r(1+r)n(1+r)n−1PMT = L \times \frac{r(1+r)^n}{(1+r)^n - 1}
where L is the loan balance, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments. Break-even divides closing costs by the monthly savings:
Break-Even (months)=Closing CostsCurrent PMT−New PMT\text{Break-Even (months)} = \frac{\text{Closing Costs}}{\text{Current PMT} - \text{New PMT}}
  • Net Lifetime Benefit:
    Total interest remaining on the current loan minus total interest on the new loan, minus refinance closing costs. A positive value means refinancing saves money over the full term.
  • Clock-Reset Check:
    If the new term extends beyond the current payoff date, the calculator warns that you are adding months of interest. A shorter-term refinance (e.g. 15 or 20 years) often produces a better net benefit even with higher payments.
  • Worked Example:
    $250,000 balance at 6.5% with 25 years remaining (current PMT ≈ $1,691). Refinance to 5.8% for 25 years, $4,000 closing costs. New PMT ≈ $1,582. Monthly savings = $109. Break-even = $4,000 ÷ $109 ≈ 37 months. Net lifetime benefit ≈ $28,700 after closing costs.

How to Use This Calculator

Enter your current mortgage details first: remaining loan balance, current interest rate, and remaining term in years. The calculator computes your current monthly payment automatically. Next, enter the proposed new loan terms: interest rate, loan term, and estimated closing costs (typically $2,000–$5,000 in 2026).
  • Cash-Out Amount (optional):
    If you plan to borrow more than your current balance, enter the additional cash-out amount. This increases the new loan balance and affects monthly savings and break-even calculations.
  • Mortgage Points (optional):
    Enter the number of points you plan to buy. Each point costs 1% of the loan amount and typically reduces the rate by about 0.25%. The calculator factors point costs into closing costs and break-even.
  • Review Break-Even Results:
    Check the break-even period and its risk classification: under 24 months (strongly recommended), 24–48 months (market dependent), or over 48 months (high risk). Compare only if you expect to stay past break-even.
  • Total Interest Comparison:
    View total interest remaining on your current loan versus the new loan, the net lifetime benefit after closing costs, and any clock-reset warning if the new term extends your debt timeline.

Understanding Refinance Break-Even Analysis

What is Break-Even Point?

Break-even point is the number of months it takes for your monthly savings to offset the closing costs of refinancing. The formula:
Break-Even (months)=Closing CostsMonthly Savings\text{Break-Even (months)} = \frac{\text{Closing Costs}}{\text{Monthly Savings}}
For example, $3,000 in closing costs with $150/month savings gives a 20-month break-even. You only benefit if you stay in the home longer than that.

Break-Even Classification

Break-even under 24 months is 'Strongly Recommended', you'll recoup costs quickly and start saving. Break-even between 24-48 months is 'Market Dependent', consider your plans and rate outlook. Break-even over 48 months is 'Caution: High Risk', rate fluctuations and life changes may negate benefits before you break even.

The 1% Rule Evolution

The old 'refinance when rates drop 1%' guideline came from lower-rate environments. Today, with baseline rates in the 5.5–6.2% range, a 0.5% drop can still pencil out if closing costs stay lean and break-even lands under 24 months. Run the numbers, don't rely on rate differential alone.

Total Interest Cost Analysis

Comparing Total Interest

Compare total interest remaining on your current loan versus total interest over the life of the new loan. Net lifetime benefit =Total Interest Saved−Refinance Costs= \text{Total Interest Saved} - \text{Refinance Costs}. That number tells you whether refinancing actually saves money over the full term, not just whether your payment drops.

The Clock Reset Problem

Refinancing resets your amortization schedule. If you're 10 years into a 30-year mortgage and refinance into a new 30-year loan, you extend your debt by 10 years. Even with a lower rate, you may pay more total interest because you're starting over with a fresh interest-heavy schedule. Consider shorter terms (15-20 years) to avoid extending your debt timeline.

When Clock Reset Makes Sense

Clock reset can be beneficial if you need lower monthly payments for cash flow, plan to pay extra principal to shorten the term, or are consolidating high-interest debt. However, if your goal is minimizing total interest, avoid resetting the clock, choose a shorter term that matches your remaining timeline.

Cash-Out Refinancing Analysis

How Cash-Out Works

Cash-out refinancing allows you to borrow more than your current balance, taking the difference in cash. For example, if your balance is $300,000 and your home is worth $450,000, you might refinance $350,000 and take $50,000 in cash. This increases your loan amount and monthly payment.

The Hidden Costs of Cash-Out

Cash-out increases your loan-to-value (LTV) ratio, which may trigger PMI, higher insurance premiums, or less favorable rates. The additional interest on the cash-out amount can negate monthly payment savings. Calculate whether the cash-out purpose (renovations, debt consolidation) provides value exceeding the increased interest costs.

When Cash-Out Makes Sense

Cash-out refinancing makes sense for home improvements that increase property value, consolidating high-interest debt (credit cards, personal loans), or funding investments with higher returns than the mortgage rate. Always compare the cost of the cash-out (additional interest) to the benefit of the cash use.

2026 Refinance Market Considerations

Current Refinance Rates

2026 refinance rates typically range from 5.5% to 6.2% for primary residences, 1-2% higher than owner-occupied purchase loans. Investment property refinances are typically 0.5-1% higher. These rates impact monthly savings and break-even calculations.

Closing Costs in 2026

Refinance closing costs typically range from $2,000 to $5,000 in 2026, including origination fees (0.5-1% of loan amount), appraisal ($400-$600), title insurance ($500-$1,500), and other fees. Some lenders offer 'no-cost' refinances by rolling costs into the loan or charging a slightly higher rate.

The Points Decision

Mortgage points are prepaid interest that lower your rate. One point typically costs 1% of the loan amount and reduces the rate by 0.25%. Paying points only makes sense if you plan to keep the home longer than the point-specific break-even period. Calculate point break-even separately: if one point costs $3,000 and saves $50/month, break-even is 60 months.

15-Year vs. 30-Year Refinance Strategy

The 15-Year Advantage

Moving to a 15-year term is the ultimate wealth-builder if your 2026 budget can handle the higher principal payment. You'll save tens of thousands in interest, build equity faster, and own your home in half the time. The higher payment is offset by significant interest savings.

The 30-Year Flexibility

A 30-year term provides lower monthly payments and more cash flow flexibility. This is beneficial if you need to free up monthly cash, plan to invest the payment difference, or want to maintain financial flexibility. You can always pay extra principal to shorten the effective term.

The Hybrid Strategy

Consider a 30-year loan with accelerated payments. Make the equivalent of a 15-year payment (or more) when possible, but maintain the flexibility to reduce payments if needed. This provides the benefits of a shorter term with the safety net of lower required payments.

Refinance Checklist 2026

Step 1: Calculate Current Loan Details

Gather your remaining balance, current interest rate, remaining term, and current monthly payment. If you don't know your exact payment, the calculator can estimate it based on your loan terms.

Step 2: Research New Loan Terms

Shop multiple lenders for current refinance rates (5.5-6.2% typical in 2026) and closing costs ($2,000-$5,000 typical). Compare offers and negotiate fees. Consider both rate and closing costs, a slightly higher rate with lower costs may have a better break-even.

Step 3: Calculate Monthly Savings

Monthly savings = Current Payment−New Payment\text{Current Payment} - \text{New Payment}. That's your immediate cash flow improvement. Cash-out increases the new loan amount and can shrink or eliminate that gap, always factor it in.

Step 4: Calculate Break-Even Point

Break-even =Closing Costs÷Monthly Savings= \text{Closing Costs} \div \text{Monthly Savings} gives you the months until refinancing pays for itself. Refinance only if you plan to stay past that date.

Step 5: Compare Total Interest

Calculate total interest remaining on your current loan versus total interest over the life of the new loan. Net Lifetime Benefit = Total Interest Saved - Refinance Costs. This reveals whether refinancing actually saves money long-term.

Step 6: Evaluate Clock Reset Risk

If you're 10+ years into your current loan and refinancing into a new 30-year term, you're extending your debt timeline. Consider a shorter term (15-20 years) that matches your remaining timeline to avoid paying more total interest.

Step 7: Consider Inflation Impact

2026's sticky inflation (2.6%) erodes the real value of savings over time. $150/month savings today is worth less in purchasing power over 10 years. Factor inflation into long-term refinance decisions.

Refinance Calculator FAQ

When should I refinance my mortgage?

Refinance when break-even (closing costs ÷ monthly savings) lands under 24 months and you expect to stay in the home past that point. The old '1% rule' is less relevant in 2026; a 0.5% rate drop can still work if closing costs are low and break-even is short.

What is a break-even point in refinancing?

The break-even point is the number of months it takes for your monthly savings to offset the closing costs of the new loan. For example, if closing costs are $3,000 and you save $150/month, your break-even is 20 months. You only benefit if you stay in the home longer than the break-even period.

How much does it cost to refinance a mortgage in 2026?

Refinance costs typically range from $2,000 to $5,000 in 2026, including origination fees, appraisal, title insurance, and other closing costs. Some lenders offer 'no-cost' refinances by rolling costs into the loan amount or charging a slightly higher interest rate.

What is the 'clock reset' problem in refinancing?

The clock reset occurs when you refinance a loan you're already paying down into a new full-term loan. For example, if you're 10 years into a 30-year mortgage and refinance into a new 30-year loan, you extend your debt by 10 years, which may increase total interest paid even with a lower rate.

Should I refinance to a 15-year or 30-year loan?

A 15-year loan saves tens of thousands in interest and builds equity faster, but requires higher monthly payments. If your 2026 budget can handle the higher payment, a 15-year term is the ultimate wealth-builder. A 30-year term provides lower payments and more cash flow flexibility.

What is cash-out refinancing?

Cash-out refinancing allows you to borrow more than your current balance, taking the difference in cash. This increases your loan-to-value (LTV) ratio and may trigger higher insurance premiums or PMI. The additional interest on the cash-out amount can negate monthly payment savings.

How do mortgage points work in refinancing?

Points are prepaid interest that lower your interest rate. One point typically costs 1% of the loan amount and reduces the rate by 0.25%. Paying points only makes sense if you plan to keep the home longer than the point-specific break-even period. Calculate the point break-even separately from the refinance break-even.

Will refinancing reset my amortization schedule?

Yes. Refinancing creates a new loan with a fresh amortization schedule. In the early years, most of your payment goes to interest. If you're already 10+ years into your current loan, refinancing resets this schedule, potentially increasing total interest paid even with a lower rate.

What is a good break-even point for refinancing?

Break-even under 24 months is strongly recommended. Break-even between 24-48 months is market dependent, consider your plans and rate outlook. Break-even over 48 months is high risk due to potential rate fluctuations and life changes.

Should I refinance if I'm planning to move soon?

Only if your break-even point is shorter than your planned move timeline. If you're moving in 12 months but break-even is 18 months, refinancing costs more than it saves. Always calculate break-even before refinancing if you have near-term moving plans.

Financial Estimation Note

General Projections: Results are mathematical estimates based on the rates and formulas currently loaded for this tool, including year-specific tax data where noted. They are intended for high-level planning only.

No Advice Provided: This site does not provide financial, tax, or legal advice. Using this tool does not create a client-advisor relationship with CalcRegistry.

Confirm Numbers: Financial laws change frequently. Please verify all results with a qualified professional (CPA, Financial Planner, or Lawyer) before making significant financial decisions.

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