Should you refinance your mortgage?
Use this calculator to compare your current loan with a new refinance offer. It will calculate your monthly savings, lifetime interest savings, and the "break-even point"—the time it takes for your savings to cover the closing costs.
Refinance Analysis
Compare your current loan vs. a new loan.
| Comparison | Current Loan | New Loan | Difference |
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Understanding the Results
Monthly Savings vs. Cost: If you switch to a shorter term (e.g., 30 years to 15 years), your monthly payment will likely increase (shown in red) because you are paying off the principal much faster. However, check the "Lifetime Savings" to see the massive amount of interest you will save.
- Monthly Savings: The difference between your current principal & interest payment and the new one.
- Break-Even Point: How long you must stay in the home to recover the closing costs. If your monthly savings are negative (cost increase), there is no break-even point on a cash-flow basis.
- Lifetime Savings: The total amount of interest you save over the life of the loan.
Frequently Asked Questions
Why did my monthly payment go up?
If you refinance into a shorter term (e.g., 27 years remaining down to 15 years), you have fewer months to pay back the principal. Even with a lower interest rate, paying the debt off faster usually requires a higher monthly payment.
What are closing costs?
Closing costs are fees charged by lenders and third parties to process your loan. They typically range from 2% to 5% of the loan amount.
Does refinancing hurt my credit score?
Temporarily, yes. The lender will perform a hard pull on your credit, which may drop your score by a few points.
