Mortgage Refinance Calculator — Should You Refinance?
Enter your current loan balance, rate, and the new rate you've been quoted. We'll show you your monthly savings, how long until you break even on closing costs, and whether refinancing makes sense given how long you plan to stay.
Your current loan
Remaining balance — $280,000
Current interest rate — 7.50%
Years remaining on current loan
New loan
New interest rate — 6.25%
New loan term
Closing costs — $6,000
Typical range: 2–5% of loan ($5,600–$14,000)
How long you plan to stay — 7 years
Current payment
$2,069
7.5% / 25yr
New payment
$1,724
6.25% / 30yr
Monthly savings
+$345/mo
Break-even
1.5 yrs
Net savings (lifetime)
-$5,890
Total interest comparison
Cumulative savings over time
Crosses zero at the break-even point — after that, every month is net profit.
Disclaimer: The results provided by this calculator are estimates for informational purposes only and do not constitute financial, legal, or tax advice. Actual loan terms, interest rates, monthly payments, and total costs will vary based on your credit profile, lender, and other factors. Property tax rates shown are state averages and may differ from your local rate. FHA mortgage insurance premiums (MIP) are based on current HUD guidelines and are subject to change. Always consult a licensed mortgage professional or financial advisor before making any borrowing decisions. HitCalc is not a lender and does not offer mortgage products.
Frequently asked questions
What is the break-even point in refinancing?
The break-even point is the number of months it takes for your cumulative monthly savings to equal the closing costs you paid to refinance. For example, if refinancing saves you $200/month and closing costs are $4,000, your break-even is 20 months. If you sell or move before that point, you lose money on the refinance. If you stay longer, every month after break-even is net savings.
When does refinancing make financial sense?
Refinancing generally makes sense when: (1) your new rate is at least 0.5–1% lower than your current rate, (2) you plan to stay in the home long enough to pass the break-even point, and (3) you have enough equity and credit score to qualify for the new rate. Refinancing to a shorter term can also make sense even with a similar rate, if your goal is to pay off the loan faster and reduce total interest.
How much does it cost to refinance a mortgage?
Refinancing closing costs typically run 2–5% of the loan amount. On a $300,000 loan that is $6,000–$15,000. Costs include origination fees, appraisal, title insurance, attorney fees, and prepaid items like taxes and insurance. Some lenders offer no-closing-cost refinances — but these roll the costs into a higher rate or larger loan balance, which you should factor into your break-even calculation.
Should I refinance to a 15-year or 30-year term?
A 15-year refinance typically offers a lower interest rate and cuts total interest paid roughly in half, but your monthly payment will be significantly higher. A 30-year refinance lowers your monthly payment but extends how long you pay interest. The right choice depends on your cash flow — if you can comfortably afford the higher 15-year payment, the long-term savings are substantial. If you need payment flexibility, 30 years with extra payments gives you the option to pay early without the obligation.
What credit score do I need to refinance?
For a conventional refinance, most lenders require a minimum 620 credit score, though 740+ gets you the best rates. FHA streamline refinance can be done with a lower score if you already have an FHA loan. VA IRRRL (VA streamline refinance) has no minimum credit score from the VA, though lenders typically require 620+. The better your credit score, the lower your rate — which directly determines whether refinancing saves you money.
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