Should I Refinance?
Compare your current mortgage to a new loan. See monthly savings, break-even timeline, and total cost comparison to make an informed decision.
Last updated October 18, 2026
How our math works
- New loan: 6.25% fixed for 30 years; current loan: 7.5% with 27 years remaining
- Closing costs of $8,000 as entered; both loans fully amortizing
- Rates shown are interest rates used for estimation only — not APRs and not offers. APR reflects fees and other loan costs and may differ from the interest rate shown.
My scenario
Enter income, debts, price, and rate once. Every calculator pre-fills.
Current Loan
$
%
$
Principal & interest only
years
New Loan
%
$
Typically 2-5% of loan amount
Monthly Savings
$286
Break-even in 28 months (2.3 years)
$2,306
$2,020
$8,000
$20,105
You save over the lifePayment Comparison
Current vs new monthly payment breakdown
$2,306
7.5% for 27 more years
$2,020
6.25% for 30 years
Save $286/month
Break-Even Analysis
When your savings exceed closing costs
At close: Closing costs remaining $8,000; 12 mo: Savings recovered $3,437, Closing costs remaining $4,563; 24 mo: Savings recovered $6,875, Closing costs remaining $1,125; Break-even (28 mo): Savings recovered $8,000.
Closing costs (financed)
$8,000
Monthly savings
$286
Recovered after 12 months
$3,437
Remaining after 12 months
$4,563
Break-even
28 months
Lifetime Cost Comparison
Total amount paid over the life of each loan
Current Loan Total
$747,144
New Loan Total
$727,039
$20,105
Interest savings: $28,105
Key Insights
What these numbers mean for you
Analysis
Closing costs of $8,000 are financed into the new loan, so your new balance starts at $328,000 — you're borrowing the costs (and paying interest on them) rather than paying them upfront.
Savings
You'll save $286/month, but it will take 28 months (2.3 years) of those savings to recoup the $8,000 closing costs.
Savings
Over the life of the loan, you'll save $20,105 total (including the financed closing costs).
Savings
You'll save $28,105 in interest charges alone.
Warning
Warning: You're extending your loan by 3 years. A lower payment from a term reset also means rebuilding equity more slowly — the break-even figure above only counts payment savings.
Refinancing Makes Sense
By refinancing from 7.5% to 6.25%, you'll save $286/month and $20,105 over the life of the loan. After 28 months of payment savings, you'll have recovered the $8,000 closing costs financed into your new loan.
Here are the exact formulas behind your numbers. No black boxes — just math.
Refinance Analysis
Current Scheduled P&I
New Loan Amount
New Monthly Payment
Monthly Savings
Break-Even Months
Total Interest Saved
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Frequently Asked Questions
A useful rule of thumb: refinancing is worth a close look when you can cut your rate by about 0.75-1 percentage point or more and you plan to stay past the break-even point — the month when accumulated payment savings exceed your closing costs.
Divide total closing costs by your monthly payment savings. For example, $6,000 in costs with $250/month savings breaks even at 24 months. If you might sell or refinance again before then, the refi likely loses money.
Refinancing into a new 30-year term re-extends your payoff date, which can lower the payment but raise lifetime interest even at a lower rate. This calculator compares total cost over your remaining horizon — not just the monthly payment — so the verdict accounts for the reset.