Use this free RatesQ refinance calculator to see how much you could save by refinancing your mortgage and find your break-even point. Adjust any input and results update instantly, no sign-up required.
Current Loan
New Loan
Refinance Costs
Typical range: 2% to 5% of the loan amount
Refinance Analysis
New monthly payment (P&I)
$1,580/mo
$227/mo less than current
Strong case to refinance
You recover closing costs in 1.8 years. That's a short break-even, and most lenders would call this a clear win.
Note: extending the term lowers your payment but adds $31,756 in total interest over the life of the loan.
The break-even point is the number that actually tells you whether refinancing is worth it. Divide your closing costs by the monthly savings, and you get the number of months until you're ahead. If you plan to stay in the home longer than that, refinancing puts money back in your pocket. If you might sell or move before then, you'll likely come out behind.
Watch the total interest line. Dropping your rate is good. But if you extend your term at the same time, say from 25 years remaining to a new 30-year loan, you can end up paying more interest over the full life of the loan even at a lower rate. The calculator shows both your monthly savings and your lifetime net impact so you can see the full picture.
When refinancing clearly makes sense: your rate drops by at least half a point, break-even is under three years, and you're not planning to move soon.
When it probably doesn't: you're only a few years from paying off the loan, the rate difference is tiny, closing costs are high, or you know you're selling within a couple of years.