Refinancing swaps your current mortgage for a new one, typically to lock in a lower interest rate, shorten your loan term, or tap into home equity. Our mortgage refinance calculator compares your existing loan against a new rate and term, showing you the monthly payment difference and how long it would take to recoup your closing costs through the savings.
The break-even point is the number that matters most here. If refinancing costs you $4,000 in closing fees and saves you $150 a month, it takes roughly 27 months to come out ahead — if you plan to move or refinance again before then, the savings may not be worth the upfront cost. Rates have shifted significantly over the past few years, so even homeowners who refinanced recently may want to run the numbers again.
Before refinancing, it’s worth comparing against other options for accessing equity, like our HELOC calculator, which estimates what a home equity line of credit would cost instead of a full refinance. Our mortgage affordability guide also covers the broader factors lenders weigh, and our mortgage affordability calculator can help you see whether a shorter loan term still fits your budget after refinancing.