The Refinance Calculator compares your current loan with a new loan to show monthly savings, total interest savings, and how long it takes to recover refinancing costs.
Refinancing lowers your payment by $147.17 a month; the costs are recovered in 3 years and 9 months.
| Current loan / New loan | |
| Loan amount | $250,000.00 / $250,000.00 |
| Monthly payment | $1,938.25 / $1,791.08 |
| Remaining term | 20 years / 20 years |
| Total payments | $465,179.36 / $429,858.64 |
| Total interest | $215,179.36 / $179,858.64 |
| Points and costs | $6,500.00 |
| Total interest saved (after costs) | $28,820.73 |
| Break-even time | 3 years and 9 months |
Refinancing replaces an existing loan with a new one, usually to get a lower rate, change the term, switch from adjustable to fixed, or take cash out of home equity. The new loan pays off the old one.
Refinancing costs money: points (each point is 1% of the loan), appraisal, title and other closing costs, often 2–5% of the loan. The break-even time is costs ÷ monthly savings. If you plan to keep the loan longer than that, refinancing likely pays off.
Worked example (defaults): $250,000 left at 7% with 20 years remaining, refinanced to 6% for 20 years with 2 points and $1,500 of fees. The payment drops by roughly $150 a month and the costs are recovered in under four years.
Resetting to a new 30-year loan can lower the payment even with no rate change, but you pay interest for longer. Compare total interest, not just the monthly payment.
When should I refinance? A common rule is when rates drop at least 0.75–1%.
Does refinancing hurt credit? A small temporary dip from the credit check.
What is a cash-out refinance? Borrowing more than you owe and taking the difference in cash.