Mortgage Refinance Calculator โ Is It Worth It?
Calculate if refinancing saves money. Break-even, monthly savings, and net savings after closing costs.
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Key figures and definitions for this model: โข New Payment: $2,146 โข Monthly Savings: $327 โข Break-Even: 2.1 yr โข Net Savings: -$30,583
Ready to run the numbers?
Why: Refinance when rate drop justifies closing costs. Break-even under 2โ3 years is typical.
How: Compare current vs new payment. Break-even = Closing Costs รท Monthly Savings. Net = Interest Saved โ Closing Costs.
Run the calculator when you are ready.
Mortgage Refinance Calculator
Break-even โข Monthly savings โข Is it worth it?
Sample Scenarios
Current Mortgage
New Mortgage
Calculation Breakdown
Current Mortgage
New Mortgage
Analysis
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1. Key Takeaways
- โข Calculate break-even before deciding
- โข Consider total cost over new term
- โข Shop multiple lenders
- โข Factor in how long you'll stay
2. When Does Refinancing Make Sense?
Good Reasons
- โข Rate drop of 0.75%+ from current
- โข Planning to stay 3+ years (past break-even)
- โข Want to remove PMI
- โข Switch from ARM to fixed
- โข Shorten loan term
Think Twice
- โข Moving soon (before break-even)
- โข Rate drop is small (<0.5%)
- โข Extending term significantly
- โข High closing costs
- โข Credit score has dropped
3. The Break-Even Rule
Break-even is when your monthly savings have covered the closing costs. Only refinance if you'll stay in the home past this point.
Break-Even Months = Closing Costs รท Monthly Savings
Example: $8,000 costs รท $200/mo savings = 40 months (3.3 years)
4. Rate Drop Impact Reference ($350K Balance)
30-year loan, current rate 7%, $8,000 closing costs:
| New Rate | Monthly Savings | Break-Even | Worth It? |
|---|---|---|---|
| 6.75% | $60 | 11 years | Maybe not |
| 6.5% | $120 | 5.5 years | Probably |
| 6% | $240 | 2.8 years | Yes |
| 5.5% | $360 | 1.9 years | Yes! |
5. Common Refinance Mistakes
Ignoring Break-Even
Moving before break-even means you paid closing costs for nothing.
Resetting the Clock
Going from 20 years left to a new 30-year loan means more total interest.
Only Looking at Payment
Lower payment but longer term can cost more over time.
Not Shopping Around
Rates and fees vary significantly between lenders.
6. Frequently Asked Questions
How much does refinancing cost?
Typically 2-5% of loan amount. A $400K refinance might cost $8,000-$20,000 in closing costs.
Can I roll closing costs into the loan?
Yes, but you'll pay interest on those costs. Calculate if it's still worth it with the higher balance.
How long does refinancing take?
Usually 30-45 days from application to closing. Shop around early to lock in rates.
7. Quick Stats
2-5%
typical closing costs
30-45
days to close
8. Sources
CFPB; lender rate sheets.
9. Disclaimer
Estimates only. Get official quotes from lenders.
For educational and informational purposes only. Verify with a qualified professional.
๐ก Money Facts
Typical closing costs
โ Lenders
Min rate drop often
โ Rule of thumb
Break-even target
โ Common
Compare lenders
โ CFPB
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