UtilibyWritten by the Utiliby editorial team · Last updated October 15, 2026 · Rules and formulas reviewed October 2026
What this free online mortgage refinance calculator does
A mortgage refinance replaces your current home loan with a new one. People do it to lower the interest rate, cut the monthly payment, shorten the term, move from an adjustable to a fixed rate, remove mortgage insurance or borrow against their equity. The hard part is knowing whether it is worth it, because a refinance is not free. You pay closing costs and sometimes points up front, and you only come out ahead if you keep the new loan long enough for the savings to repay them.
This free online mortgage refinance calculator answers that directly. It compares the loan you have with the loan you could get, finds the break-even month, shows the net saving after the years you plan to stay, and adds up the total interest and payoff date of both loans. It also shows a yearly schedule, a savings chart and what-if tables for other rates and terms. It works for a home, a condo or a second property, and in several currencies. Everything runs in your browser, so your numbers stay private.
How to use the mortgage refinance calculator
- Enter the current loan. Use your balance (not the original amount), the rate, and the years left. If you know your exact principal and interest payment, type it in the optional box. Otherwise the tool calculates it.
- Enter the new loan. Put in the rate you were quoted and choose a term. Add closing costs as a percentage of the loan, any points and fixed fees such as an appraisal or a penalty on the old loan.
- Decide how to pay the costs. Pay them at closing or roll them into the loan. Rolling in avoids cash up front but raises the balance.
- Set how long you will stay. This drives the verdict, the net saving and the rate you would need.
- Read the results. The verdict gives the headline, the tiles show payment, break-even and interest, and the chart shows your cumulative savings month by month.
- Test alternatives. The what-if tab shows other rates and terms, and the schedule tab shows the new loan year by year.
The refinance maths, step by step
| Measure | How it is worked out |
|---|---|
| New loan | Current balance + cash out (+ costs, if rolled in) |
| Monthly payment | Loan × r ÷ (1 − (1 + r)−n), where r is the monthly rate and n the number of months |
| Monthly saving | Current payment − new payment (including any extra principal) |
| Total costs | Closing costs + points + fixed fees |
| Break-even month | First month in which total payments saved (less any costs paid at closing) reach zero |
| Lifetime interest saved | Interest on the current loan − interest on the new loan − costs |
Worked example. You owe 300,000 at 6.75% with 27 years left, so your payment is about 2,015. A new 30-year loan at 5.75% costs about 1,751 a month, a saving of 264. Closing costs of 2.5% are 7,500. Dividing 7,500 by 264 gives about 28.4, so you break even in month 29. If you stay seven years you keep roughly 14,700 after costs, and over the full life of the loans the net saving is about 15,000.
Now shorten the new term to 27 years to match what you have left. The payment becomes about 1,825, a saving of 190 a month, and the break-even moves to month 40. But the lifetime saving jumps to nearly 54,000, because you are no longer restarting the clock. Both versions are valid; they answer different questions. The first lowers your monthly cost, and the second lowers your total cost.
How the break-even point works
The break-even point is the most useful single number in a refinance decision, and it is simple to understand. You spend money on day one. Every month afterwards your lower payment hands a little of it back. The break-even month is when you have been handed back everything you spent. Until then the refinance is a cost. After it, it is a saving.
A common rule of thumb is that a refinance is worth considering when you will stay in the home well beyond the break-even, often cited as two to three years or more. The calculator makes the rule personal: it compares your break-even with the years you say you will stay, and it works out the highest new rate that would still repay your costs within that time. If your quoted rate is above that figure, the refinance probably does not pay off for you.
Break-even can mislead in two situations. If you plan to move early, a refinance that looks good on paper may never repay its costs. If you extend the term, the break-even on payments can look quick while the total interest goes up, which is why this tool shows interest as well as payments.
Choosing the new term: lower payment or lower total cost
The new term changes the answer more than most people expect. A 30-year loan gives the lowest payment, but it spreads the balance over the longest period and usually costs the most interest. A 15-year loan has a higher payment and a lower rate, and it repays the loan far sooner. A 20-year or 25-year loan sits in between.
If your goal is a lower monthly cost, the 30-year term is the simplest choice. If your goal is to pay less overall, match the new term to the years you have left, or go shorter. You can also take a 30-year loan and make extra principal payments each month, which keeps your flexibility but still shortens the loan. Enter an extra amount in the calculator and watch the payoff date move. Use the Rate and term what-if tab to compare terms side by side at your new rate.
Closing costs, points and rolling costs into the loan
Refinance costs vary by lender, state and loan size, and they are commonly quoted at around 2% to 6% of the loan. They include lender origination fees, the appraisal, title search and insurance, recording fees and prepaid items. You will receive a Loan Estimate within three business days of applying, and a Closing Disclosure at least three business days before closing. Compare the Loan Estimates of several lenders, because costs and rates both differ.
Points. One discount point costs 1% of the loan and usually lowers the rate by a small amount that varies by lender and market. Points make sense only if you keep the loan long enough to repay them, which is exactly what break-even measures.
Rolling costs in. If you roll the costs into the loan you pay nothing at closing, but you borrow more and pay interest on the costs. The calculator solves this properly: when percentage costs are rolled in, the loan is grown so that the costs are a percentage of the final loan. A "no-closing-cost" refinance usually works the same way or carries a higher rate, so enter the quoted rate and see the result.
When a refinance makes sense
- The rate has dropped enough. Instead of a fixed rule such as one percentage point, check break-even. A smaller drop can pay off on a large loan, and a bigger drop can fail on a small one.
- You will stay a long time. Long stays give the savings time to repay the costs.
- Your credit or equity has improved. Better credit and a lower loan-to-value can unlock a lower rate and remove mortgage insurance.
- You want to shorten the loan. A shorter term can save a lot of interest if you can afford the payment.
- You want a fixed rate. Moving from an adjustable to a fixed rate can protect you from payment increases.
When a refinance may not make sense
- You may move soon. If the break-even is later than your sale date, you lose money.
- Your current rate is already low. A small drop rarely repays the costs.
- You are far into a short loan. Late in a loan most of each payment is principal, so there is little interest to save.
- You would restart a long term just to lower the payment, and total cost matters more to you than monthly cash flow.
- Your loan has a prepayment penalty. Enter it as a fixed fee to count it.
Taxes also matter. Under current US rules, points paid on a refinance are generally deducted over the life of the new loan, not all at once, and the deduction rules for mortgage interest have limits. Ask a tax adviser about your situation.
Tips to get a better refinance deal
- Get Loan Estimates from at least three lenders on the same day, because rates move daily.
- Compare the APR and total fees, not just the headline rate.
- Check your credit report for errors before you apply.
- Ask whether the lender will waive or reduce any fees, and whether there is a penalty on your existing loan.
- Decide your term first, so you compare like with like.
- Rate-lock only when the numbers work in the calculator.
Common mistakes this calculator helps you avoid
- Using the original loan amount instead of today's balance.
- Ignoring how long you will stay. A big saving on paper means little if you move in a year.
- Comparing a 30-year payment with a 22-year payment and treating the difference as pure saving.
- Forgetting points and fixed fees. They are part of the break-even.
- Judging by the monthly payment alone. Always check the total interest.
Related refinance tools and guides
This calculator is one of a set of free refinance tools on Utiliby. Depending on what you are deciding, these may help next.
- Refinance Break-Even Calculator: test the payback month for your stay.
- Cash-Out Refinance Calculator: if you want to borrow against your equity.
- Refinance Closing Costs Calculator: itemise fees and compare points.
- FHA, VA and USDA Streamline Refinance Calculator: for FHA, VA and USDA streamline loans.
- Refinance Loan Term Calculator: compare 10 to 30-year terms.
- Refinance vs HELOC Calculator: compare a refinance with a HELOC.
- Remove PMI Refinance Calculator: if you want to end PMI.
- Rental Property Refinance Calculator: for rental and investment properties.
- Remortgage Calculator UK: for UK borrowers.
- Mortgage Refinance Calculator Canada: for Canadian borrowers.
- Home Loan Refinance Calculator (Australia): for Australian borrowers.
- Home Loan Refinance Calculator India: for borrowers in India.
For background reading:
- How to Calculate Mortgage Refinance Savings
- Is Mortgage Refinance Interest Tax Deductible?
- Refinancing with Bad Credit, Self-Employed Income or Negative Equity
- Mortgage Refinance by State: Costs and Taxes
Privacy, accuracy and limits
The calculator runs entirely in your browser. The figures you enter are not sent to a server and are not stored, and reloading the page returns the example. Files you download are created on your device. The model assumes fixed rates and level payments, so it does not cover adjustable-rate loans, interest-only periods or balloon payments. Real-life lender fees, rates and rules vary, so use this as a first check and confirm every figure with a Loan Estimate.
Frequently asked questions
How do I use this free mortgage refinance calculator?
Enter your current balance, rate and years left, then the new rate, term and costs. The tool shows the new payment, the monthly saving, the month your savings repay the costs, the interest over the life of each loan and the net saving after the years you plan to stay.
What is a refinance break-even point?
It is the month when the money you have saved on payments equals the closing costs and points you paid. Before that month you are behind. After it, the refinance is saving you money. Costs divided by the monthly saving gives a quick estimate.
How long should I stay in the house after refinancing?
At least until the break-even month, and ideally well past it. The calculator compares your break-even with the years you say you will stay, so you can see the net saving at the point you expect to sell or move.
How much are mortgage refinance closing costs?
They are often quoted as roughly 2% to 6% of the loan amount, and they include lender fees, appraisal, title and recording charges. Your Loan Estimate lists the exact figures, so use that instead of a guess once you have it.
What are discount points on a refinance?
One point costs 1% of the loan and usually lowers the rate by a small amount that depends on the lender and the market. Enter the points as a percentage to see whether the lower rate repays the extra cost in your time frame.
Should I roll closing costs into the new loan?
Rolling them in means no cash at closing, but the loan is larger, so the payment is slightly higher and you pay interest on the costs. Choose Roll into the new loan to compare. It often suits people with little cash and a long stay.
Does a 30-year refinance cost more in interest?
Often yes, because restarting a 30-year clock stretches repayment. If you have 22 years left and refinance into 30, the payment falls but you borrow for 8 more years. Set the term to Same as years left to see the saving without that effect.
What is the difference between payment savings and interest savings?
Payment savings is the drop in your monthly cheque. Interest savings is the total interest you avoid over the life of the loans. A longer term can lower the payment while raising total interest, so the tool shows both.
Can I refinance to a shorter term, like 15 years?
Yes. Choose 15 years as the new term. The payment is usually higher, but the loan is repaid sooner and total interest is much lower. The what-if tab compares 10, 15, 20 and 30 years at your new rate.
What if I do not know my exact monthly payment?
Leave the payment box blank and the calculator works it out from your balance, rate and years left. If you know your real principal and interest payment, enter it and the tool uses it for the current loan.
Are property taxes and insurance included?
They are not part of the saving, because they usually stay the same after a refinance. You can enter them to see your total monthly payment, but the break-even and savings use principal and interest only.
Can I take cash out in this calculator?
Yes. Enter an amount in Cash taken out and it is added to the new loan. The cash is not counted as a saving, so the payment will usually rise. Use the dedicated cash-out refinance calculator for loan limits and equity.
What does LTV mean and why does it matter?
Loan-to-value is the loan divided by the home value. Lenders offer better terms at lower LTV, and many require mortgage insurance when it is above 80%. Enter your home value to see LTV before and after.
What is the rate needed to break even?
The tool also works out the highest new rate that still repays your costs within the years you plan to stay. If your quote is above it, the refinance may not pay off in time.
Does the calculator include prepayment penalties or mortgage insurance?
No. Add any prepayment penalty on the current loan to the other fixed fees so it counts as a cost. Mortgage insurance changes are not modelled, so check your Loan Estimate for them.
Is my information private?
Yes. The calculator runs in your browser. Nothing you enter is sent to a server, saved or shared, and reloading the page resets it.
Is this mortgage refinance calculator free?
Yes. It is a free online calculator with no sign-up, trial or limit. You can print or download the results.
Sources and further reading
- Consumer Financial Protection Bureau, "What is a mortgage refinance?" and "When should I refinance my mortgage?" (consumerfinance.gov/ask-cfpb).
- Consumer Financial Protection Bureau, Loan Estimate and Closing Disclosure explainers (consumerfinance.gov).
- Freddie Mac, Primary Mortgage Market Survey, for average US mortgage rates (freddiemac.com/pmms).
- Internal Revenue Service, Publication 936, Home Mortgage Interest Deduction, on points paid on a refinance (irs.gov).
- Standard loan amortization formulas for fixed-rate mortgages, as used in lender disclosures under the Truth in Lending Act.
Sources were consulted in October 2026. Standards and rules can change, so always check the official page for your situation.