Refinance Calculator
What a new rate really saves, and how long until the closing costs pay for themselves.
The break-even point is the decision
Refinancing trades closing costs today for a lower payment every month. Divide the costs by the monthly saving: that is how many months until you are ahead. If you might sell or refinance again before then, the deal loses money no matter how good the rate looks. $5,000 in costs at $180 saved per month breaks even in 28 months.
Watch the term reset
Refinancing 25 remaining years into a fresh 30-year loan lowers the payment twice: once from the rate, once from stretching the debt. The stretch is not savings, it is five extra years of interest. For an honest rate comparison, set the new term equal to the years you have left. The lifetime figure here counts every payment plus the closing costs.
When refinancing makes sense
The old rule of thumb was a full percentage point of rate improvement. The real test is the break-even point against how long you will keep the loan, and whether you can pay closing costs in cash rather than rolling them into the balance, where they accrue interest for decades.