Mortgage Refinance Calculator: Payments, Costs & Break-Even

A lower monthly payment is one part of refinancing

Refinancing replaces an existing loan with a new one. This calculator compares repayment of the same outstanding balance at two fixed rates and terms. You pay closing costs separately in cash; there is no cash-out or increase to the loan balance.

Monthly reduction = current monthly P&I − new monthly P&I.
Simple break-even months = cash closing costs ÷ positive monthly reduction, rounded up.
Lifetime savings = remaining current-loan payments − new-loan payments − cash closing costs.

How to read simple break-even

This measures recovery of cash costs through lower scheduled payments while both loans are active. It does not measure equity or the cost of selling at a particular date. If the monthly payment is not lower, or the calculated recovery falls after either loan ends, the tool reports that simple break-even is not reached while both loans run.

Why can payment savings and lifetime savings disagree?

Extending a loan can lower payments while adding years of interest. Shortening the term can raise payments but reduce lifetime costs. Review both measures and the repayment durations. Lifetime totals are undiscounted and assume you keep each loan until payoff.

What this comparison leaves out

Escrow, PMI, taxes, prepayment penalties, financed fees, adjustable rates, cash-out, and the time value of money are excluded. Use actual lender quotes; example rates are editable scenarios, not current offers. The schedule download covers the new loan only.

Reference and methodology

Background reading: Federal Reserve consumer guide to mortgage refinancing. Calculations use the formulas and assumptions explained on this page.

About this calculator

Prepared by the UtilitiesWeb team at The Alpha 1 Company. Estimates are educational illustrations, not personalised financial advice, lending decisions, or guaranteed outcomes. Verify important decisions against provider documents and qualified advice where needed.

Methodology updated: 1 November 2026. Example rates and costs are assumptions, not live market quotes. Amounts are calculated at full precision and rounded for display.