US mortgage decision calculator

Mortgage Refinance Calculator USA

Compare your current mortgage with a proposed refinance using closing costs, payment break-even, your expected time in the home, remaining balances and the effect of restarting the loan term. A lower payment is not automatically a better financial result.

Payment: See the real monthly change Break-even: Check whether it arrives before you move Equity: Compare what you will still owe Term: Expose years added or removed
Updated June 2026
Method Same-horizon amortization
Includes Costs, balances and term reset
Purpose Educational planning estimate

Build the comparison

Mortgage details

Step 1
Current mortgage Enter the loan you would keep if you do not refinance.
Use the principal balance from your latest mortgage statement, not the original loan amount.
Enter the note rate shown on the existing mortgage.
Enter the time remaining, not the mortgage’s original term.
Calculated current P&I
Calculated automatically Uses the current balance, rate and remaining term.
Proposed refinance Use the rate, term and costs from the quote you want to test.
Use the quoted note rate. APR includes additional costs and is not interchangeable with this field.
A fresh 30-year term may lower the payment while extending the payoff date.
Include lender and third-party costs you expect to pay. Points and lender credits can be entered under Advanced assumptions.
Percentage of current balance will be calculated automatically.
Financed costs reduce cash due now but increase the new mortgage balance and interest.
This is the key decision horizon. Use the time until you expect to sell, move, pay off the loan or refinance again.
Advanced assumptions Add PMI, cash-out, points, lender credits or ARM risk only when they materially affect your quote. Optional

Refinance type

Choose the purpose that best describes the proposed transaction.

This changes the interpretation, not the lender’s eligibility rules.

Equity and mortgage insurance

These fields improve the balance, LTV and PMI comparison without changing the core refinance calculation.

Used only to estimate the new loan-to-value ratio. It does not guarantee approval or PMI removal.
Estimated refinance LTV
Not calculated Add a home value to estimate the ratio.
Enter only mortgage insurance that is currently included in your monthly payment.
Use the monthly mortgage-insurance amount from the proposed quote when applicable.

Cash added or received

Cash-out increases secured debt. Cash-in reduces the new balance but uses additional money at closing.

Cash received is additional mortgage debt, not refinance savings.
Cash-in reduces the refinanced principal but remains an upfront contribution, not a transaction fee.
Estimated new principal
Calculated automatically Includes cash-out, cash-in and financed costs when selected.

Cost detail

Separate points, lender credits and penalties so the engine does not hide or double-count them.

Linked to the dollar closing-cost field. The last edited field remains the source of truth.
Points are priced from the base refinance principal.
Linked to discount points. The last edited value controls the pair.
Credits reduce eligible refinance fees. Excess credits are flagged rather than treated as profit.
Enter only when your current loan documents show an actual penalty.
Applied to the proposed refinance path after the required payment.

Optional lender-credit quote

A no-closing-cost scenario is calculated only when you provide the actual alternative rate.

Leave blank unless a lender provided a specific higher-rate, lender-credit alternative.
No-cost scenario status
Not included Add a quoted alternative rate to compare it.

Your result is a planning estimate. Compare the final numbers against the lender’s Loan Estimate and Closing Disclosure.

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Before you compare

Quick notes

A lower payment can still create more lifetime interest when the loan term restarts.

Closing costs matter only if you keep the loan long enough to recover them.

Financing fees lowers cash due now but increases the mortgage balance and interest.

Cash-out is additional debt secured by the home, not refinance savings.

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Start with the real quote

How to use this mortgage refinance calculator

Enter the mortgage you have today, then test one proposed refinance quote at a time. The most useful inputs normally come from your latest mortgage statement and the lender’s Loan Estimate—not from a rate advertisement.

01

Describe the mortgage you would keep

Use the current principal balance, note rate and remaining term. The calculator derives the current principal-and-interest payment so incompatible manual payment figures cannot distort the comparison.

02

Enter the proposed refinance accurately

Use the quoted note rate, proposed term and total estimated closing costs. Specify whether those costs are paid at closing or added to the new loan.

03

Choose your actual decision horizon

Enter how long you realistically expect to keep the home or refinanced loan. A refinance that works over 30 years may still lose money if you sell after two years.

04

Read the balance and term warnings

Do not stop at monthly savings. Review the balance at your planned exit, equity-adjusted benefit, payoff-date change and balance remaining when the original mortgage would have ended.

Read past the payment

What your refinance result actually means

A positive result means the proposed refinance is estimated to leave you in a better mortgage-related position by your selected horizon after payment differences, entered PMI, upfront costs, cash movements and remaining loan balances are compared on the same date.

A negative result does not necessarily mean the quoted interest rate is poor. The problem may be expensive closing costs, a planned move before break-even, financed fees, cash-out debt or a new term that slows principal repayment.

Use the amortization schedule comparison to examine how the current and proposed balances change over time when equity progress is the main concern.

Positive planned-horizon benefit

Estimated savings have recovered the transaction costs and any balance disadvantage by the date you expect to leave.

Near-neutral result

The refinance may work, but the margin is too small to absorb rate changes, revised fees or an earlier-than-expected move.

Negative planned-horizon benefit

Payment relief has not yet recovered closing costs, extra debt or the higher remaining balance by your selected date.

A practical refinance test

How to decide whether refinancing is worth it

A defensible refinance decision should pass four separate tests. One strong number cannot compensate for every other weakness.

Test 1

Does the refinance solve the intended problem?

Decide whether the goal is lower monthly cash flow, faster payoff, lower interest, removal of PMI, cash access or protection from an ARM reset. Different goals produce different good answers.

Test 2

Does break-even occur with time to spare?

Reaching break-even one month before a planned sale creates almost no safety margin. A stronger refinance crosses into positive value well before the expected exit.

Test 3

What happens to the remaining balance?

If the refinanced balance is materially higher at the planned exit, part of the monthly savings may simply be delayed principal repayment.

Test 4

Would another structure be stronger?

Compare the proposed term with a term matching the current remaining mortgage. A slightly higher payment can preserve far more interest savings and avoid a major payoff-date reset.

Headline result

Monthly savings

The difference between the current payment and the proposed refinance payment. This matters for household cash flow, but it does not include the complete economic effect.

Decision result

True economic savings

Payment differences adjusted for closing costs, cash movements, PMI and the difference between the two remaining loan balances at the same point in time.

The cost must be recovered

Closing costs and refinance break-even

Appraisal charges, lender fees, title services, recording charges, points and other transaction costs determine how long the payment improvement takes to become real. Use the net costs from the quote rather than assuming every refinance costs a fixed percentage.

Costs paid upfront

The transaction begins with a cash deficit. Payment savings must first recover that amount before the refinance produces positive cash flow.

Costs financed into the loan

There may be little cash due at closing, but the fees increase principal, payment, remaining balance and interest. There is no conventional upfront-cost break-even to divide.

Lender-credit or “no-cost” quote

The cost is commonly shifted into a higher rate or lender pricing. Compare the actual alternative rate rather than modelling the same low rate with zero costs.

The hidden timeline change

The mortgage term-reset problem

Refinancing a mortgage with 22 years remaining into a new 30-year loan adds eight years to the scheduled payoff date. The payment may fall because the balance is spread across more months, not only because the rate improved.

Current path 22 years remaining
Proposed refinance New 30-year term

For an adjustable mortgage, first estimate the payment shock the refinance may avoid and then compare that stability benefit with the refinance costs and new payoff date.

Do not mix two decisions

Rate-and-term versus cash-out refinancing

Rate-and-term

Replace the mortgage structure

The main purpose is to change the rate, payment, term or loan type without materially increasing the amount borrowed.

  • Focus on break-even and term reset.
  • Compare remaining balances.
  • Separate upfront and financed fees.
Cash-out

Replace the mortgage and borrow more

The transaction combines a refinance decision with a new borrowing decision. Cash received improves liquidity, but the new mortgage balance and secured interest exposure rise.

  • Cash received is not savings.
  • Measure incremental payment and interest.
  • Review resulting LTV and repayment risk.

Before replacing an attractive first-mortgage rate solely to access equity, compare a HELOC as a separate borrowing alternative .

Illustrative homeowner cases

Real refinance scenarios and the decision behind them

These examples are simplified illustrations. Actual outcomes depend on the exact loan balance, quote, fees, timing and mortgage terms entered above.

01

Lower rate with a quick break-even

A homeowner owes $320,000 at 7.25% and receives a 6.25% quote with $8,000 of upfront costs. Monthly P&I falls by roughly $280 and payment break-even occurs in about 29 months.

Main risk
Selling earlier than expected.
Decision takeaway
Stronger when the homeowner expects to keep the loan well beyond break-even.
02

Lower payment but five years added

A borrower with 25 years remaining chooses a new 30-year term. The rate improves and the payment falls, but the payoff date moves five years later.

Main risk
The payment reduction is partly created by time.
Decision takeaway
Compare a 25-year refinance before accepting the 30-year structure.
03

Moving before break-even

Closing costs are $9,000 and monthly savings are $250, creating a simple break-even near 36 months. The homeowner expects to move in two years.

Main risk
The property is sold before transaction costs recover.
Decision takeaway
The quote needs lower costs, a lower rate or a longer holding period.
04

Same-remaining-term refinance

The borrower has 24 years remaining and compares a new 30-year quote with a 24-year refinance at the same rate. The 24-year payment is higher than the 30-year option but keeps the original payoff timing.

Main risk
Choosing cash-flow relief without checking total cost.
Decision takeaway
The same-term option may preserve significantly more lifetime-interest savings.
05

Closing costs financed into the loan

An $8,000 fee package is added to the mortgage. The borrower avoids writing an $8,000 check, but starts with a higher balance and pays interest on those fees.

Main risk
Financed fees are mistaken for free refinancing.
Decision takeaway
Compare the added interest with the value of preserving cash at closing.
06

Cash-out used for home improvement

A homeowner adds $50,000 to the mortgage for a renovation. The project may be worthwhile, but the new payment and interest cannot be presented as part of the refinance savings.

Main risk
Long-term mortgage debt is used for a shorter-lived cost.
Decision takeaway
Evaluate the mortgage refinance and the $50,000 borrowing as two linked but separate decisions.
07

ARM borrower switching to fixed

The current ARM rate is 6.10%, but the borrower models a possible reset to 8.30% in 12 months. A fixed refinance at 6.50% may offer limited savings today but reduce exposure to a large payment shock.

Main risk
The assumed future ARM rate may not occur.
Decision takeaway
Treat the cost difference as the price of payment stability, not guaranteed savings.
08

Lender credits with a higher rate

One quote offers 6.25% with $8,000 of costs. Another offers 6.75% with lender credits covering most fees. The higher-rate option may work for a short holding period but become expensive when kept longer.

Main risk
“No-cost” language hides the rate tradeoff.
Decision takeaway
Compare both quotes at the homeowner’s actual planned exit date.

Where refinance comparisons fail

Common mortgage refinance mistakes

01

Comparing interest rates only

A lower rate can still produce a weak result when fees are high or the new term is much longer.

02

Using payment savings as the verdict

Payment relief does not reveal how much principal remains at the planned exit.

03

Ignoring closing costs

The refinance must recover transaction costs before payment savings become meaningful.

04

Double-counting financed fees

A fee added to principal must not also be subtracted as an upfront cash cost.

05

Restarting 30 years automatically

A new long term can reduce the payment while extending interest exposure.

06

Treating cash-out as profit

Cash received increases mortgage debt and remains secured by the home.

07

Assuming “no closing costs” means free

Costs may be recovered through lender pricing, credits or a higher rate.

08

Ignoring the expected move date

A refinance can look strong over 30 years and still lose money before an upcoming sale.

09

Comparing different horizons carelessly

Lifetime totals and five-year results answer different questions and should be labelled separately.

10

Reviewing only one Loan Estimate

Rate, points, lender credits and third-party fees can vary enough to change the decision.

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Calculation methodology

How the mortgage refinance calculation works

The calculator creates two monthly amortization paths: keeping the current mortgage and completing the proposed refinance. Both paths are evaluated using the same monthly timeline.

Monthly payment
M = P × [r(1+r)n] ÷ [(1+r)n − 1]

P is principal, r is the monthly interest rate and n is the remaining number of monthly payments. At a zero interest rate, principal is divided evenly across the term.

Payment break-even
Upfront refinance costs ÷ monthly payment savings

This shortcut is shown only when costs are paid upfront and the new monthly payment is lower.

Equity-adjusted result
Current path cost − refinance path cost

Both path costs include cumulative payments, entered PMI and remaining balance. Refinance costs and cash movements are added separately so principal is not mislabelled as pure expense.

TermReset™
Proposed term − current remaining term

The engine also calculates how much refinance balance remains on the date the current mortgage would have been fully repaid.

Know the model’s boundaries

What is included and excluded

Included

  • Current and proposed principal-and-interest payments
  • Monthly amortization and remaining balances
  • Upfront versus financed closing costs
  • Points, lender credits and prepayment penalties
  • Cash-out and cash-in treatment
  • Entered current and proposed PMI
  • Payment and equity-adjusted break-even
  • Planned-stay and lifetime comparisons
  • Payoff-date and term-reset impact

Not automatically included

  • Property taxes, homeowners insurance and HOA dues
  • Tax deductibility or after-tax interest effects
  • Future home-value appreciation
  • Investment returns on cash kept or spent
  • Automatic PMI-removal dates
  • Future market-rate predictions
  • Every FHA, VA, USDA or conventional program rule
  • Credit, income and appraisal approval

When PMI is the main reason for considering a refinance, estimate when mortgage insurance may become removable without refinancing before replacing the entire loan.

Planning estimate, not an approval

Program and lender limitations

Refinance pricing and eligibility depend on credit history, income, debt obligations, home value, occupancy, loan type, appraisal, property condition and lender overlays. Program requirements can differ for conventional, FHA, VA and USDA loans.

The calculator does not guarantee a rate, appraisal, cash-out limit, PMI outcome, seasoning period, approval or tax treatment. Use the lender’s final disclosures as the controlling source for actual figures.

Approval can still fail Credit, DTI, appraisal and lender overlays can override a quote.
Cash to close must be verified Compare the Loan Estimate with the Closing Disclosure before signing.
Program rules are not universal FHA, VA, USDA and conventional loans can lead to different outcomes.

Model assumptions

Assumptions behind the estimate

Monthly payments

Both loans are modelled with monthly principal-and-interest payments and monthly compounding.

Stable entered rates

Fixed-rate paths use the entered rate for the remaining term. ARM mode uses the specific reset assumption entered by the user.

PMI values

Entered PMI is treated as constant until the corresponding loan is paid off. Automatic cancellation is not predicted.

No automatic tax effect

Interest deductions, points treatment and other tax outcomes require separate professional verification.

Extra payment

An entered extra payment is applied to refinance principal after the required monthly payment.

Rounded display

Results may be shown as rounded dollars, but calculations and exported schedules retain greater precision.

Mortgage refinance questions

Frequently asked questions