Refinancing replaces your current mortgage with a new loan, typically at a lower interest rate. The key question is whether the monthly savings justify the closing costs. Our calculator computes the break-even point — the number of months until your cumulative savings exceed the cost of refinancing. It also shows the true long-term cost comparison including opportunity cost (what you could earn investing the closing costs instead).
Refinancing is generally worth it when you can lower your rate by at least 0.5%–1%, plan to stay in the home past the break-even point, and the closing costs are reasonable. Our calculator shows your exact break-even timeline so you can decide based on your specific situation.
The break-even point is the number of months it takes for your monthly payment savings to exceed the closing costs of the new loan. If you plan to stay in your home longer than the break-even period, refinancing likely makes financial sense.
Refinancing closing costs typically range from 2%–5% of the loan amount. This includes appraisal fees, title insurance, origination fees, and other charges. Some lenders offer "no-cost" refinancing by rolling costs into the loan or charging a slightly higher rate.
Refinancing from a 30-year to a 15-year mortgage increases your monthly payment but can save significant interest over the life of the loan. Use this calculator to compare scenarios and see the total cost difference.
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