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Mortgage Refinance Calculator: Is It Worth It?

Written by Calcida Team
Reviewed for accuracy and clarity
Last updated: April 2026

Compare your current mortgage to a refinance scenario and estimate the break-even point.

This page focuses on the tradeoff between closing costs and monthly savings, plus how term and rate changes affect long-term cost.

For related tools, browse Mortgage Calculators.

Current Loan

New Refinance Loan

Monthly Savings
$322
Break-Even Point
1y 4m
Lifetime Savings
-$10,526

Total Cost Comparison Over Time

Key Insights

  • Your new monthly payment will be $1,703 (Current: $2,026).
  • It will take 16 months to recoup your $5,000 in closing costs through monthly savings.
  • Warning: Refinancing will cost you $10,526 more over the long run, likely due to extending the loan term or high closing costs.
    • 0

Is refinancing worth the closing costs?

Calculate your break-even point and total savings.

Closing Costs →
APR CompareRate Comparison

How This Calculator Works

This refinance calculator compares your current mortgage to a new loan scenario to estimate payment changes and break-even time.

  • Enter current loan details: Remaining balance, current rate, remaining term, and your current monthly payment (if requested).
  • Enter the refinance offer: New rate and term, plus any upfront costs (points, lender fees, title, etc.).
  • Calculate monthly savings: Estimate how much the new payment changes compared to the current payment.
  • Estimate break-even: Closing costs divided by monthly savings gives a quick “months to break even” estimate.
  • Interpret the result: If you plan to keep the loan beyond break-even, refinancing is more likely to help.

Formula

Monthly Savings = Current Payment − New Payment; Break-even (months) = Closing Costs / Monthly Savings
Where:
  • Closing Costs = total refinance fees paid upfront or rolled into loan
  • Monthly Savings = current payment − new payment
  • Break-even = months needed for savings to cover closing costs
A refinance often makes more sense when you plan to keep the loan beyond the break-even point.
Resetting to a longer term can lower the payment but increase total interest paid.

Example Calculation

Current payment$2,350/month
New payment$2,100/month
Closing costs$6,000
Break-even point
≈ 24 months
If you expect to sell or refinance again before the break-even point, refinancing is less likely to pay off.

Should You Refinance Your Mortgage?

Refinancing is usually about one of three goals: lowering the rate, changing the term, or changing the loan structure. The “right” choice depends on time horizon and costs.

  • Break-even matters: A great rate doesn’t help if you move or refinance again before costs are recovered.
  • Term tradeoff: Extending the term can lower the payment but increase total interest; shortening the term can raise payment while reducing total interest.
  • Closing costs are real: Include points and fees, not just the rate.

Quick Checklist Before Refinancing

  • Confirm your expected time in the home (or how long you’ll keep the loan).
  • Compare APR and total cost, not just the headline rate.
  • Model both “costs paid upfront” and “costs rolled into the loan” scenarios.

Related tools: the Mortgage Payment Calculator, Mortgage Amortization Calculator, and Closing Costs Calculator.

Frequently Asked Questions

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