When does it make sense to refinance a mortgage?

Refinancing makes sense if the new rate is at least 0.5–1% lower and you plan to stay past the break-even point (closing costs ÷ monthly savings). A lower rate also reduces total interest paid over the life of the loan.

Refinance Savings Calculator

Compare your current mortgage payment to a refinanced loan to estimate monthly savings.

This tool runs in your browser. None of your data is saved or sold.

Remaining balance ($)

Current rate (%)

Years remaining on loan (years)

New rate (%)

New loan term (years)

Closing costs ($)

About This Calculator

Refinancing replaces your current mortgage with a new one — ideally at a lower rate or better terms. This calculator compares your current and new monthly payments to show monthly savings. Pair it with the Refinance Break-Even Calculator to see how long it takes to recover closing costs.

Estimates only — not financial, tax, legal, or investment advice. Verify important results with a qualified professional before making decisions.

old PMT and new PMT both use PMT = P × r / (1 − (1+r)^−N); monthly savings = old PMT − new PMT; break-even (months) = closing costs ÷ monthly savings