Crunch Mortgage Refinance Calculator
Rates dropped? Compare your current loan against a refinance — monthly savings, how fast closing costs pay for themselves, and total interest over the remaining life.
Current loan
New loan
| Current monthly payment | $0 |
| Monthly savings | $0 |
| Break-even on closing costs | — |
| Interest saved over loan life | $0 |
How it works
Both payments use the amortization formula M = P × r(1+r)n / ((1+r)n − 1). Break-even = closing costs ÷ monthly savings — the point where savings repay the refinance cost. Lifetime interest compares total interest on the current remaining term vs the new term.
Formula & worked example
Formula: Both loans use the standard payment formula M = P × r(1+r)^n ÷ ((1+r)^n − 1) on today's balance — your current payment is re-amortized over the years you have left. Monthly saving = current payment − new payment, and break-even = closing costs ÷ monthly saving, rounded up.
Worked example: Owe $350,000 at 7.875% with 28 years left (payment $2,584) and refinance to 6.25% for 30 years (payment $2,155): you save $429 a month, so $8,000 of closing costs break even in 19 months — and total interest falls by $92,353 over the two terms.
Frequently asked questions
When does refinancing make sense?
When you'll own the home past the break-even point and the numbers work: lower payment, lower lifetime interest, or both. If you might sell before break-even, the closing costs are money lost.
What is the 1% rule?
An old rule of thumb: refinance when the new rate is at least 1 percentage point below your current rate. With today's closing costs, run the break-even math instead — a 0.5% drop can pay off if costs are low.
Cash-out vs rate-and-term refinance?
Rate-and-term only changes your rate or term; cash-out borrows extra against equity for cash in hand. Cash-out rates run higher and reset your balance upward — use it for value-adding uses, not spending.
🏠 Know your full payment picture
Model any loan with our mortgage calculator.