ganak.appRefinance Calculator
Free refinance calculator with break-even analysis, monthly savings, and amortization comparison. See if refinancing your mortgage is worth it with cash-out support.
Yes, Refinancing Makes Sense
Break even in 1 yr 4 mo, then save $22,022 over 7 years
Payment Summary
Monthly payment comparison and savings breakdown
Current
$2,120/mo
New
$1,799/mo
+$322
1 yr 4 mo
$22,022
over 7 yrs
$5,000
Loan Comparison
Side-by-side breakdown of current vs refinanced mortgage
| Metric | Current | New |
|---|---|---|
| Loan Amount | $300,000 | $300,000 |
| Interest Rate | 7.00% | 6.00% |
| Remaining Term | 25y 0m | 30 years |
| Monthly Payment | $2,120.34 | $1,798.65 |
| Total Interest | $336,101 | $347,515 |
| Total Cost | $636,101 | $652,515 |
| Net Interest Savings | -$16,413 | |
Rate Sensitivity
How different rates affect your savings and break-even
| New Rate | Payment | Savings/mo | Break-Even |
|---|---|---|---|
| 5.50% | $1,703 | +$417 | 12 mo |
| 6.00%current | $1,799 | +$322 | 16 mo |
| 6.50% | $1,896 | +$224 | 23 mo |
| 7.00% | $1,996 | +$124 | 41 mo |
Cumulative Interest Comparison
Total interest paid over time for each loan
Year-by-Year Comparison
Annual balance and interest breakdown for both loans
| Year | Current Bal. | New Bal. | Cur. Int. | New Int. |
|---|---|---|---|---|
| 1 | $295,411 | $296,316 | $20,855 | $17,900 |
| 2 | $290,489 | $292,405 | $20,523 | $17,673 |
| 3 | $285,212 | $288,252 | $20,167 | $17,431 |
| 4 | $279,554 | $283,844 | $19,786 | $17,175 |
| 5 | $273,486 | $279,163 | $19,377 | $16,903 |
| 6 | $266,980 | $274,194 | $18,938 | $16,615 |
| 7 | $260,004 | $268,918 | $18,468 | $16,308 |
| 8 | $252,523 | $263,317 | $17,963 | $15,983 |
| 9 | $244,502 | $257,371 | $17,423 | $15,637 |
| 10 | $235,900 | $251,057 | $16,843 | $15,270 |
What Is a Refinance Calculator?
Determine whether replacing your current mortgage saves money
A Refinance Calculator compares your current mortgage against a new loan to show whether refinancing makes financial sense. It calculates your new monthly payment, total interest savings, and the break-even point — the number of months it takes for your monthly savings to offset closing costs.
Reduce your monthly mortgage payment by securing a lower interest rate
See exactly when your savings exceed the cost of refinancing
Compare total interest paid on your current vs new mortgage
Borrow against equity for renovations, debt payoff, or other needs
How Mortgage Refinancing Works
The formula and methodology behind the numbers
Refinancing replaces your existing mortgage with a new loan, typically at a lower interest rate. The calculator uses the standard amortization formula to compute monthly payments:
Monthly Payment Formula:
M = P × [r(1+r)n] / [(1+r)n - 1]
Where P = principal, r = monthly interest rate, n = total number of months
Break-Even Formula:
Break-Even = Total Closing Costs ÷ Monthly Savings
If your break-even is shorter than your expected stay, refinancing pays off.
Example:
$300,000 balance at 7% with 25 years remaining. Refinancing to 6% for 30 years with $5,000 closing costs:
- Current payment: $2,120/mo
- New payment: $1,799/mo
- Monthly savings: $322/mo
- Break-even: ~16 months
When Should You Refinance?
Decision framework for homeowners
Rate drop of 0.5-1% or more
A rate reduction of at least 0.5% typically makes refinancing worthwhile for most loan sizes. Larger balances benefit from even smaller rate drops.
You plan to stay 5+ years
The longer you stay past the break-even point, the more you save. If you're moving within 2-3 years, refinancing costs may not be recouped.
Your credit score has improved
A higher credit score since your original mortgage can qualify you for significantly better rates, especially if you've moved from fair to good/excellent.
Switching from ARM to fixed rate
If you have an adjustable-rate mortgage and rates are rising, locking in a fixed rate provides payment certainty and protects against future increases.
Be cautious about resetting to 30 years
Refinancing from 20 remaining years to a new 30-year term lowers payments but increases total interest significantly. Consider a 15 or 20-year term instead.
Common Refinancing Mistakes
Pitfalls to avoid when refinancing your mortgage
Ignoring closing costs
Closing costs typically run 2-5% of the loan. A lower rate doesn't help if you move before recouping these costs. Always check the break-even point.
Only comparing monthly payments
A lower payment with a longer term can mean more total interest. Compare the total cost of both loans, not just the monthly amount.
Resetting the clock without reason
Going from 20 years remaining to a new 30-year loan adds 10 years of payments. Consider matching or shortening your remaining term.
Cashing out for consumption
Cash-out refinancing increases your loan balance. Using it for home improvements (adds value) is smarter than using it for vacations or consumer purchases.
Not shopping multiple lenders
Rates and fees vary significantly between lenders. Get at least 3-4 quotes. Even a 0.125% difference in rate can save thousands over the loan life.
Frequently Asked Questions
Common questions about mortgage refinancing
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Last updated Mar 23, 2026