Home and mortgage
Refinance Calculator
Whether refinancing your mortgage pays off: the new payment, the monthly saving, how long the closing costs take to earn back, and the change in total cost.
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Refinancing $300,000 with 27 years left at 7.75%, with $6,000 of costs, into a new 30-year loan
| New rate | Monthly saving | Break-even |
|---|---|---|
| 7% | $216 | 2 years 4 months |
| 6.5% | $316 | 1 year 7 months |
| 6% | $414 | 1 year 3 months |
| 5.5% | $509 | 1 year |
How this calculator works
The monthly saving is your current principal and interest minus the new one. The break-even point is closing costs divided by that saving: how many months until the refinance has paid for itself.
The lifetime comparison adds the interest left on your current loan against the new loan's interest plus closing costs. A new 30-year term can lower the payment yet cost more overall, because it restarts the clock.
Questions people ask
When is it worth refinancing?
When you'll keep the home longer than the break-even period. A common rule of thumb looks for a rate at least half to three-quarters of a point lower, but break-even time is what matters.
How much does it cost to refinance?
Usually 2% to 5% of the loan in closing costs: lender fees, appraisal, title and recording. Points to buy the rate down add more.
Does refinancing restart my loan?
Yes, a new loan starts a new schedule. Choosing a shorter term, or paying the old payment on the new loan, avoids stretching the payoff date.
Does refinancing hurt my credit?
The application adds a hard inquiry and a new account, a small, short dip. Shopping several lenders within a few weeks counts as one inquiry for scoring.
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Updated by the RateHerald team. The maths is tested against worked examples; report a problem.