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Mortgage Refinance Calculator

Refinancing pays off when your monthly savings recover the closing costs before you sell or refinance again. Enter your current loan, the new rate and term, and closing costs (pre-filled with the California average), and the calculator shows your break-even month, your position after the years you plan to stay, and whether lifetime interest goes up or down.

Refinance break-even

When does refinancing make sense?

Three tests. First, the new payment is lower. Second, you recover closing costs before you plan to move — the break-even. Third, total interest does not rise more than you are comfortable with. Resetting a loan you are 10 years into back to 30 years can lower the payment while raising lifetime interest; the calculator shows both.

Refinance break-even

What closing costs should I expect?

Typically 2% to 5% of the loan amount: lender fees, appraisal, title, recording, and in some states transfer taxes. California averages are pre-filled; replace with your Loan Estimate when you have one.

Refinance break-even

What about cash-out refinancing?

Add the cash you want to take out and the calculator increases the new loan, recalculates the payment and shows the true cost. Cash-out rates are usually slightly higher than rate-and-term refinance rates.

Worked example

A real refinance example

A $320,000 balance at 7.25% with 25 years left refinanced to 6.0% over 30 years saves about $394 a month. With 2.5% closing costs ($8,000) the break-even is 20 months — but lifetime interest rises about $4,800 because of the longer term. Choosing a 25-year term instead keeps the savings and the shorter payoff.

Common questions

Common questions about this calculator

How much does a rate need to drop for a refinance to be worth it?+
There is no fixed rule. If the break-even is well inside the time you will keep the loan, it is worth it — often at a 0.5% to 0.75% reduction on a large balance.
Can I roll closing costs into the loan?+
Usually yes. Add them to the cash-out field to see the effect on payment and interest.
Will refinancing reset my loan term?+
Only if you choose a longer term. Pick a term equal to your remaining months to avoid extending the loan.
Does refinancing hurt my credit?+
A hard inquiry and a new account cause a small, temporary dip.
Should I refinance to remove PMI?+
If your equity is over 20% and rates are similar, removing PMI alone can justify a refinance — or ask your servicer to cancel PMI without refinancing.
What is a no-closing-cost refinance?+
The lender covers costs in exchange for a higher rate. Set closing costs to 0 and raise the rate slightly to compare.

Local help

Financing help in Inglewood, CA

Last reviewed September 09, 2026. Methodology: standard amortization formula; refinance break-even defaults use California averages and should be replaced with your own quotes. Estimates only — not financial advice or a loan offer.

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