New payment, monthly saving and the month a refinance pays back its closing costs
Estimates only, not financial advice. What you type stays on your device. Checked against sources on 6 Oct 2026.Refinancing $300,000 at 7.25% with 27 years left into a 30-year loan at 6.25% cuts the payment by $265.43 a month, from $2,112.58 to $1,847.15. The $6,000 of closing costs are repaid in month 25 counting interest saved, and lifetime interest falls by $13,502 after costs.
Enter what you still owe, your current rate and the years left on the loan.
Enter the new rate and term from the lender quote, and the closing costs on its Loan Estimate.
Choose whether you pay the closing costs in cash or roll them into the new loan.
Read the new payment, the monthly saving and the break-even month.
Compare the interest left on your current loan with the new loan plus costs before you decide.
The Refinance Calculator compares the loan you have with the one a lender is offering. Enter what you still owe, your current rate and the years left, then the new rate, term and closing costs. It shows the new payment, the monthly saving, the month the refinance pays for itself, and the interest on each loan.
The payment. Both loans use the standard amortization formula, P × r × (1 + r)^n ÷ ((1 + r)^n − 1), with r the yearly rate divided by 12 and each month's interest rounded to the cent. On the CFPB's sample Loan Estimate, $162,000 at 3.875% for 30 years, it gives the published $761.78.
Two break-even figures. The rule of thumb divides the closing costs by the monthly saving. The headline figure counts interest instead: the first month in which the interest saved so far equals the closing costs. The two differ when the new term is longer or shorter, or when costs or cash are added to the loan. A 15-year refinance can raise the payment and still break even quickly, because so much less interest is charged.
Cash or rolled in. Paying the costs in cash keeps the new loan the same size as your balance. Rolling them in avoids cash at closing, but the loan is larger and you pay interest on the costs for the whole term.
Cash out. Any cash taken out is added to the new loan. Enter the home value to see the new loan-to-value; lenders set their own limit for cash-out loans.
What it does not do. It covers fixed-rate loans only. Mortgage insurance, escrow for tax and insurance, points bought to lower the rate, tax deductions and adjustable rates are not modelled. Enter the rates and costs from real quotes: the figures shown at first are examples. To estimate the closing costs themselves, use the Closing Cost Estimator.
The simple method divides the closing costs by the monthly saving: $6,000 ÷ $265.43 is 22.6, so about 23 months. A fuller method finds the month when the interest saved reaches the costs, which also counts a longer term or interest on rolled-in costs. Both figures are shown.
Often, if you keep the home past the break-even month. On $300,000 with 27 years left, going from 7.25% to 6.25% saves $265.43 a month and repays $6,000 of costs in about two years. Restarting a 30-year term cuts the lifetime saving to $13,502, so compare terms as well as rates.
Paying cash keeps the loan smaller and the saving larger. Rolling $6,000 into a $300,000 loan at 6.25% adds $36.94 to the payment and about $7,300 of interest over 30 years. Rolling them in makes sense when cash is short or will earn more elsewhere.
A new loan restarts the term. Paying interest for 30 more years on a loan that had 27 left can outweigh a lower rate, especially near the end of a loan, when most of each payment is principal. Choosing a new term close to the years left gives a fair comparison.
The cash is added to the new loan, so the payment and the interest rise. Taking $50,000 out on a $300,000 balance at 6.25% for 30 years makes the payment $2,155.01, which is $42.43 more than the current $2,112.58 at 7.25%. Lenders limit how much of the home value can be borrowed.
Escrow for property tax and insurance, mortgage insurance, points bought to lower the rate, tax deductions and adjustable rates are not modelled. A prepayment penalty on the current loan should be added to the closing costs. Every rate and cost is an input, so use the figures from a real Loan Estimate.
Rates and rules change; check the source before you rely on a figure.
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Also works as: Mortgage Refinance Calculator.