How to use this calculator
- Enter what you owe from your latest statement, your rate, and the years and months of payments left. The calculator shows the principal and interest those work out to, so you can check them against your statement.
- Enter the new loan from its Loan Estimate: the rate, the term, the points in section A, and the other closing costs in sections D and E, less any lender credit in section J. Leave out prepaid interest and escrow, which you would pay either way.
- Choose whether you will pay the closing costs in cash or add them to the loan.
- Set how many years you expect to keep the new loan, until you sell or refinance again. The CFPB suggests trying “the shortest amount of time, the longest amount of time, and the most likely amount of time.”
- Under More options, enter the payment you actually make if you have paid extra, cash you would take out, a second offer (for example one with points), mortgage insurance on either loan, or a return on the money a refinance saves each month.
The numbers already filled in are an example. Replace them with your own.
How it's calculated
Both loans are run month by month. Each payment pays that month's interest first, a twelfth of the yearly rate times the balance, and the rest reduces the balance. Your current loan's payment is the one that repays what you owe over the time left; the new loan's is the one that repays its amount over its term.
For each choice, the cost over the years you keep the new loan is the interest it charges, its mortgage insurance and, for a refinance, its closing costs. That is the Loan Estimate's own “In 5 Years” comparison without the principal, taken to your number of years, and it comes to the same as the payments you make plus what you would still owe at the end. So a new loan that lowers the payment by stretching the debt over more years gets no credit for the part of the drop that is only a slower payoff.
An example
You owe $329,000 at 7.79% with 27 years left, a payment of $2,434.98 a month. A new 30-year loan at 7.4% with $3,700 of closing costs paid in cash has a payment of $2,277.93. Over 5 years, keeping your loan costs $124,233 in interest; refinancing costs $118,656 in interest plus the $3,700, $122,356 in all, so it comes out $1,876 ahead. It pulls ahead after 3 years 2 months. Kept for 19 years 3 months, it falls behind again: by then the longer term's slower payoff has cost more interest than the lower rate saved.
The real break-even and the shortcut
The common shortcut divides the closing costs by the drop in the monthly payment: $3,700 ÷ $157.05 is 23.6, rounded up to 24 months in the example. It treats the whole drop as a saving, but part of your current payment was repaying the loan faster. Counting what you would still owe, the break-even is 38 months. The error runs the other way when the new loan keeps your payoff date: refinancing into the 27 years left at 6.5%, the shortcut says 14 months and the real break-even is 11, because that loan pays its balance down faster than yours.
Points, and a second offer
One point is 1% of the loan, paid at closing for a lower rate; a lender credit is the same trade the other way, and you enter it by taking it off the closing costs. When points are added to the loan they are a percent of the loan that includes them. With a second offer the calculator compares the two with each other as well as with keeping your loan: in the example, the offer at 7.15% with 1 point pulls ahead of the one with none after 4 years.
Cash out
Cash you take out is more debt, so its interest counts as a cost of the refinance. The calculator also states what the cash costs as a yearly rate: the rate at which the money you receive now equals what the refinance takes from you each month and adds to what you owe, against keeping your loan or against the same refinance without the cash. On a low-rate loan that rate can be far above the new loan's rate, because the higher rate applies to your whole balance, not only to the cash.
Counting what your money could earn
By default, money a refinance saves or costs each month is counted dollar for dollar, as the Loan Estimate does. When the new payment is higher, as with a shorter term, that treats the extra you pay as money that would otherwise sit idle. Turn on “Count what your money could earn” to credit the money each choice leaves you with a return you set, compounded monthly; cash you take out is still counted at face value.
Assumptions and limits
- Both loans are fixed-rate with monthly payments, each charged a twelfth of its yearly rate on the balance each month. An adjustable-rate mortgage, an interest-only, balloon or reverse mortgage is not modeled.
- The new loan's first payment falls in the month your current loan's next payment would. A refinance often skips a month and collects prepaid interest at closing; that interest replaces interest your current loan would have charged for the same days, so it is left out of both sides, as is the interest since your last payment that is added to your payoff.
- Escrow, property tax and homeowners insurance are the same either way and are left out. Your old escrow balance is refunded and a new one funded, a timing difference rather than a cost.
- Your current loan's payment is worked out from what you owe, the rate and the time left, unless you enter the payment you make.
- Closing costs are what you enter, net of any lender credit; a credit larger than the costs usually pays prepaid items or reduces the loan, and isn't counted. The default, $3,700, is the 2025 median of a 30-year conventional rate-and-term refinance's loan costs with discount points taken out ($3,657.65 across 251,274 loans), which AdviceOnly computed from the federal Home Mortgage Disclosure Act data, rounded up for recording fees.
- Private mortgage insurance is taken to end as soon as federal law lets you ask, when your balance reaches 80% of the home's original value, which needs a written request, a good payment history and a value that hasn't fallen. The Homeowners Protection Act covers borrower-paid insurance on a one-unit home you live in, for loans made on or after July 29, 1999; it doesn't cover lender-paid insurance or loans a lender classes as high risk. Cancelling on a new appraisal is up to your servicer and isn't counted.
- FHA's annual mortgage insurance premium lasts 11 years for a loan made at 90% of the home's value or less, and the life of the loan above that, for FHA loans with case numbers from June 3, 2013. Premiums are held level, and one premium is used for both new offers.
- Everything is before tax: the mortgage interest deduction and the deduction of points are not counted.
- It doesn't check whether a lender would make the loan, beyond notices about the loan's share of your home's value, and doesn't count a prepayment penalty on your current loan or a home equity line of credit instead of cash out.
- The default current rate is Freddie Mac's weekly survey average for a 30-year fixed loan in the week of October 26, 2023, its highest that year, on a loan that was 80% of the median price of houses sold in late 2023. The default new rate is the same survey's average for the week of October 15, 2026, and the default years kept is the five years the Loan Estimate compares loans over.
Input field details
What to enter in each box, where to find the number, and how this calculator treats it. When two calculators give different answers from the same numbers, it's usually because they handle one of these differently.
What you owe now
The principal balance of your current mortgage today.
Where to find itYour latest mortgage statement ("principal balance" or "unpaid principal").
How this tool treats itThe comparison starts from this balance, not from your original loan, so any extra you have paid is already counted. Interest since your last payment, which a payoff adds, is left out of both sides.
Allowed range$1,000 to $5,000,000
Interest rate
The note rate on your current loan, to up to three decimals (6.875).
Where to find itYour mortgage statement or promissory note. Use the interest rate, not the APR, which adds fees.
How this tool treats itEach month’s interest is a twelfth of this yearly rate on the balance, rounded to the cent and paid before principal.
Allowed range0% to 20%
Not includedA rate that changes: an adjustable-rate loan is modeled at the rate you enter for its whole life.
Time left: years
The whole years of payments left on your current loan.
Where to find itYour statement (payments remaining) or your note’s maturity date.
How this tool treats itWith the months beside it, this sets how many payments are left. Your principal and interest are worked out from the balance, the rate and this time, and shown so you can check them against your statement.
Allowed range0 to 40 years
Time left: months
The months of payments left beyond the whole years, 0 to 11.
Where to find itYour statement or your note’s maturity date.
How this tool treats itA time left of 0 years and 0 months is read as one payment.
Allowed range0 to 11 months
New interest rate
The interest rate the lender offers on the new loan.
Where to find itPage 1 of the Loan Estimate, "Interest Rate". A Loan Estimate is the three-page form a lender must give you within three business days of your application, so you can compare offers on the same terms.
How this tool treats itRefinancing replaces your current loan with a new one: the new loan pays off what you owe, and you repay the new loan on its own rate and term.
Allowed range0% to 20%
New loan term
How many years the new loan runs, or the time left on your current loan.
Where to find itPage 1 of the Loan Estimate, "Loan Term".
How this tool treats itA refinance that changes the rate or the term without taking cash out is a rate-and-term refinance. Each loan is repaid in level monthly payments, interest first and the rest to principal: its amortization. A longer term lowers the payment but pays the balance down more slowly, which is why the comparison counts what you would still owe. "Same as the time left" uses your loan’s months left, up to 30 years, which separates the rate’s saving from the term’s.
Points
The discount points the offer charges, as a percent of the loan amount (1 point is 1%).
Where to find itLoan Estimate page 2, section A, "% of Loan Amount (Points)".
How this tool treats itPoints are an upfront charge for a lower rate. Paid in cash, they are a percent of the loan; added to the loan, they are a percent of the loan that includes them, so they cost a little more in dollars. Enter a lender credit under other closing costs, not as negative points.
Allowed range0 to 4 points
Other closing costs
The offer’s closing costs other than points, less any lender credit, in dollars.
Where to find itLoan Estimate page 2: sections D and E, minus the points in section A, minus any lender credit in section J. Leave out prepaid interest, insurance and escrow (sections F and G).
How this tool treats itClosing costs are the lender’s and third parties’ fees for making the loan. A lender credit is money the lender puts toward them in exchange for a higher rate; it lowers this figure. A credit larger than the costs is not counted. The default, $3,700, is the 2025 median for a 30-year rate-and-term refinance with points taken out, from the federal HMDA loan data.
Allowed range$0 to $100,000
Pay the closing costs
Whether you pay the points and other closing costs in cash at closing or add them to the new loan.
Where to find itYour choice with the lender; the Closing Disclosure shows which you chose.
How this tool treats itAdded to the loan, the costs raise the loan amount and you pay interest on them for as long as you keep it. Paid in cash, they count in full in the first month.
Years you expect to keep the new loan
How long you expect to keep the new loan before you sell or refinance again.
How this tool treats itThe answer is the interest, mortgage insurance and closing costs each choice costs over these years, the Loan Estimate’s own comparison taken to your horizon, which is the same as counting the payments plus what you would still owe at the end. The break-even is the first month refinancing has cost less than keeping your loan, counting what you would still owe, rounded to that whole month. Try the shortest, likeliest and longest time you might keep it.
Allowed range1 to 30 years
My payment is different
Tick it if the principal and interest you pay each month differ from what the calculator works out, for example because you pay extra.
Your monthly principal and interest
The principal and interest you pay each month on your current loan, in dollars and cents.
Where to find itYour mortgage statement. Leave out escrow for taxes and insurance, and mortgage insurance.
How this tool treats itA payment above the worked-out one ends your loan sooner. One more than $1.00 below it would not repay the loan in the time left, so the worked-out payment is used instead.
Allowed range$0 to $50,000
Take cash out
Tick it if you would borrow more than you owe and receive the difference at closing.
Cash out
The cash you would receive at closing from the new loan.
Where to find itYour Loan Estimate, or the amount you plan to ask for.
How this tool treats itA cash-out refinance borrows more than you owe and pays you the difference. The cash is counted at face value and earns nothing here; its cost is shown as a yearly rate, against keeping your loan and, with a second offer that takes less cash, against that offer.
Allowed range$0 to $2,000,000
Not includedWhether a lender would lend that much. FHA and many lenders allow a cash-out refinance up to 80% of the home’s value.
Compare a second offer
Tick it to compare two offers with each other and with keeping your loan, for example the same loan with and without points.
Second offer: interest rate
The second offer’s interest rate, from the lender’s quote.
Where to find itPage 1 of the second Loan Estimate.
How this tool treats itHow much a point lowers the rate depends on the lender, the loan and the market, so use the quote rather than a rule of thumb.
Allowed range0% to 20%
Second offer: term
How many years the second offer runs, or the time left on your current loan.
Where to find itPage 1 of the second Loan Estimate.
Second offer: points
The second offer’s discount points, as a percent of the loan amount.
Where to find itSection A of the second Loan Estimate.
Allowed range0 to 4 points
Second offer: other closing costs
The second offer’s closing costs other than points, less any lender credit.
Where to find itSections D and E of the second Loan Estimate, minus its points and any lender credit in section J.
How this tool treats itPaid in cash or added to the loan the same way as the first offer’s.
Allowed range$0 to $100,000
Second offer: cash out
The cash the second offer would pay you at closing.
How this tool treats itIt starts at $0, so with cash out ticked the second offer is the same refinance without the cash, and the difference between the two prices the cash itself.
Allowed range$0 to $2,000,000
My loan has mortgage insurance
Tick it if you pay mortgage insurance on your current loan.
Where to find itYour mortgage statement or escrow statement.
Your loan’s mortgage insurance a month
The mortgage insurance premium you pay each month on your current loan.
Where to find itYour mortgage statement or escrow analysis.
How this tool treats itHeld level until the insurance ends under the rule you pick.
Allowed range$0 to $5,000
Your loan’s insurance ends
Which rule ends the mortgage insurance on your current loan.
Where to find itYour loan’s mortgage insurance disclosure; an FHA loan says FHA on its paperwork.
How this tool treats itPrivate mortgage insurance protects a conventional lender if you stop paying. On a one-unit home you live in, federal law lets you ask to cancel it once the balance reaches 80% of the home’s original value, ends it on its own at 78% on schedule, and ends it in any case after the loan’s midpoint; this assumes you ask as soon as you can. FHA’s annual mortgage insurance premium lasts 11 years on a loan made at 90% of value or less, and the life of the loan above that, for loans with FHA case numbers from June 3, 2013.
Not includedCancelling on a new appraisal, which is up to your servicer; and lender-paid insurance, which the federal rule does not cover.
Home value when you took out your loan
The home’s value when your current loan was made.
Where to find itThe lower of the purchase price and the appraisal, or the appraisal alone if your loan was a refinance.
How this tool treats itSets the 80% and 78% points at which private mortgage insurance ends.
Allowed range$1,000 to $20,000,000
Your loan’s original term
The number of years your current loan was written for.
Where to find itYour promissory note.
How this tool treats itWith the time left, it says how long you have had the loan, which decides when the midpoint and FHA’s 11 years fall. A term shorter than the time left is read as the time left.
The new loan will have mortgage insurance
Tick it if the new loan will carry mortgage insurance.
Where to find itPage 1 of the Loan Estimate, "Mortgage Insurance".
New loan’s mortgage insurance a month
The monthly mortgage insurance premium on the new loan.
Where to find itPage 1 of the Loan Estimate, "Mortgage Insurance".
How this tool treats itOne premium is used for both offers, held level until it ends.
Allowed range$0 to $5,000
New loan’s insurance ends
Which rule ends the mortgage insurance on the new loan.
How this tool treats itPrivate mortgage insurance ends at 80% of the value the lender relied on for the refinance, and no later than the new loan’s midpoint; a new loan at or below 80% needs none. FHA’s annual premium lasts 11 years or the life of the loan, as for your current loan.
Home value now
What the home is worth today.
Where to find itThe appraisal for the new loan, or your best estimate before you have one.
How this tool treats itThe loan-to-value is the loan divided by the home’s value. It decides whether the new loan needs mortgage insurance (above 80% for a conventional loan), how long an FHA premium lasts, and how much cash a lender may let you take out.
Allowed range$1,000 to $20,000,000
Count what your money could earn
Tick it to count a return on the money a refinance saves or costs you each month, and on closing costs paid in cash.
How this tool treats itOff, that money earns nothing, so the cost matches what you can check on your Loan Estimate. A new loan that takes more each month then looks better than it is, and the page says so.
Return on money you keep
The yearly return, before tax, you would expect on money you keep.
How this tool treats itCompounded monthly. Cash you take out earns nothing here.
Allowed range0% to 20%
Questions
Is refinancing my mortgage worth it?
How do I find the break-even on a refinance?
Why does the real break-even differ from closing costs divided by the monthly savings?
Should I pay points to lower my rate?
Should I add the closing costs to my new loan?
Does refinancing restart my mortgage?
Are points on a refinance tax-deductible?
Can refinancing get rid of my mortgage insurance?
Version history
- October 17, 2026 (version 1.0.0): First version. Compares keeping your mortgage with up to two refinance offers over the years you'll keep the loan, counting points, closing costs, mortgage insurance and what you'd still owe.