Refinance Calculator

Breakeven months = closing costs / monthly savings, rounded up to the next whole month. If your closing costs are $4,000 and your new loan saves you $200 per month, you break even in 20 months. Stay in the home past that point and every additional month is net savings.

A $300,000 balance with 25 years remaining at 7% carries a payment of about $2,120 per month. Refinancing that same balance to 5.5% on a new 30-year loan drops the payment to roughly $1,703, saving about $417 per month. With $4,000 in closing costs the breakeven is 10 months, and lifetime interest savings net of those costs come to roughly $18,900.

The rate gap between old and new loan is the biggest lever, followed by closing costs and how long you plan to stay. Stretching back to a 30-year term can lower the monthly payment even with a modest rate cut, but it also resets your payoff clock and can reduce or erase the lifetime interest savings.

Rolling closing costs into the new loan hides their true cost: you pay interest on those fees for the life of the loan. Also, restarting the term means your early payments are again mostly interest, so equity build-up slows. The calculator's lifetime savings figure already subtracts closing costs to show the real net benefit.

No. Mortgage interest is deductible only if you itemize, and most Americans no longer do after the 2017 Tax Cuts and Jobs Act nearly doubled the standard deduction. Treat the pre-tax numbers as your effective savings unless your tax situation is unusual. Consult a tax advisor if you are close to the itemizing threshold.