How to use this calculator
- Enter your current balance, rate and years left.
- Enter the new rate, term and closing costs from the lender’s Loan Estimate.
- Choose whether to pay the costs in cash or add them to the loan.
Frequently asked questions
When does refinancing make sense?
When you will keep the loan past the break-even point — the month your savings repay the closing costs. In the example ($320,000 at 7.25% refinanced to 6.25% with $7,000 of costs), you save $283 a month and break even in 2 years 1 month.
Does restarting a 30-year term cost more?
It can. The example stretches the 27 years left into a new 30-year loan, for a lifetime saving of $13,802. Refinancing to a 27-year term instead saves $206 a month and $59,886 over the life of the loan.
Is half a percentage point enough to refinance?
Sometimes. A 0.5-point drop on the example loan saves $178 a month, with a break-even of 3 years 4 months. Whether that is worth it depends on how long you will stay.
Should I pay closing costs or roll them into the loan?
Rolling them in avoids cash at closing but adds interest on the costs for the life of the loan. Paying in cash gives the lower total cost if you have the money.