Refinance Calculator

This refinance calculator works as both a mortgage refinance calculator and an auto loan refinance calculator. Type your current loan into the left panel and the new rate you have been quoted into the right. The tool returns your new monthly payment, your monthly savings, your break-even point, and the lifetime interest savings. All math runs in your browser, so you can flip scenarios as fast as you type.

1. Enter your current loan balance. Use the remaining principal from your most recent statement, not the original loan amount. For a mortgage refinance calculator, this is usually the payoff balance. For a car refinance, use the current payoff from your lender.
2. Enter your current interest rate. Look at the rate on your mortgage statement or auto loan paperwork. For an ARM that is about to adjust, enter the rate you expect after adjustment to get a realistic comparison.
3. Enter your current monthly payment. Use the principal and interest portion only. Do not include escrow for taxes and insurance, since those costs do not change when you refinance.
4. Enter your remaining term in years. If you are 5 years into a 30-year mortgage, enter 25. For a 60-month auto loan with 38 payments left, enter roughly 3.2 years.
5. Enter the new interest rate. Get a real rate quote from at least three lenders or a rate sheet. Posted rates often assume perfect credit, a 20% down payment, and points paid at closing.
6. Pick the new loan term. A shorter term saves more interest but raises the monthly payment. Keeping the same total payoff date (new term equal to remaining term) is the cleanest apples-to-apples comparison.
7. Enter closing costs. Mortgage refinances typically run 2 to 5 percent of the balance. Auto loan refinances usually cost 0 to $500 in title and lien fees. If your lender offers a no-closing-cost option, enter zero and expect a slightly higher rate.

Look at two numbers in the result panel: monthly savings (what you pay less each month) and the break-even point (how long until those savings pay back your closing costs). If you plan to keep the loan longer than break-even, refinancing puts money back in your pocket. If you will sell or pay off the loan sooner, skip the refinance or negotiate a lower closing-cost package. The lifetime savings number shows what the full new loan costs you in total interest compared to your current loan.

The refinance calculator above runs three core equations. Knowing what each one does makes it easy to sanity-check any mortgage refinance calculator or auto loan refinance calculator quote a lender gives you.

1. Monthly Savings

Monthly Savings = Old Monthly Payment − New Monthly Payment

Example: $300,000 balance
Old: 7.0% over 30 years  → $1,996/month
New: 6.0% over 30 years  → $1,799/month
Monthly Savings = 1,996 − 1,799 = $197/month

2. Break-Even Months

Break-Even Months = Closing Costs ÷ Monthly Savings

Example: $4,500 closing costs, $197/month savings
Break-Even = 4,500 ÷ 197
           = 22.8 months
           ≈ 1 year 11 months

If you plan to keep the house (or the loan) longer than the break-even point, the refinance is worth it. Sell earlier and you lose money on the deal.

3. Total Interest Saved Over the Remaining Term

Total Interest Saved = (Old Payment × Old Months)
                     − (New Payment × New Months)
                     − Closing Costs

Example (same loan as above, 30-year new term):
Old: 1,996 × 360 = $718,560 total paid
New: 1,799 × 360 = $647,640 total paid
Interest Saved = 718,560 − 647,640 − 4,500
               = $66,420 lifetime

Quick Reference: $300,000 Balance, 30-Year Term, $4,500 Closing Costs

How the numbers shift on a typical mortgage refinance as the new rate drops from the current rate of 7.0%:

A 1-point rate drop (7% to 6%) saves roughly $197 per month and $66,000 over the life of the loan. A 2-point drop (7% to 5%) nearly doubles the monthly savings and roughly doubles the lifetime interest saved. Small rate moves matter more on larger balances and longer terms.

A refinance calculator gives you a number. Whether that number is worth acting on depends on your balance, your timeline, your credit, and the type of loan you are refinancing. These are the practical rules that matter more than any rule of thumb.

The 1% Rule and When It Breaks

The old advice says refinance only if the new rate is 1 percentage point below your current rate. That rule is a rough starting point, not a law. It fails in two directions:

• Small balances. On a $90,000 balance, a 1% rate drop saves about $60 per month. With $3,500 in closing costs, break-even is almost 5 years. Unless you stay put that long, the refinance is a wash.
• Large balances. On a $600,000 jumbo, a 0.5% drop saves around $190 per month. With $8,000 in closing costs, break-even is about 42 months. Staying in the home past three and a half years makes the refinance a clear win, even though the rate drop is only half a point.

Use the calculator above, not the 1% rule. Break-even is the only number that matters.

Rate-and-Term vs Cash-Out Refinance

There are two common mortgage refinance types, and a cash out refinance calculator works a little differently from a straight rate-and-term tool.

A cash-out refinance turns home equity into spendable money at mortgage rates, which is cheaper than almost every other form of borrowing. It makes sense for home improvements or high-interest debt payoff, not for discretionary spending. A $40,000 cash-out at 6.5% costs about $253 per month added to your mortgage versus $887 per month on a 20% credit card for the same balance.

Real Closing Costs on a Mortgage Refinance

Most mortgage refinances cost between $2,000 and $6,000 for loans under $400,000, or 2 to 5 percent for larger balances. A realistic line-item breakdown on a $300,000 refinance:

• Origination fee (0.5 to 1% of loan): $1,500 to $3,000
• Appraisal: $400 to $700
• Title insurance and title search: $1,000 to $2,000
• Recording fees and transfer taxes: $100 to $500
• Credit report, flood certification, and misc: $100 to $300

No-closing-cost refinances exist but are not free. The lender rolls those fees into the rate (usually 0.25 to 0.5% higher) or into the new balance. Use the calculator with both scenarios to see which comes out ahead at your break-even horizon.

When to Refinance Even If the Headline Rate Is Similar

A refinance can still pay off even when rates have not moved much:

• Your credit score jumped 40+ points since the original loan. A 680 score refinancing into a 740 score can cut your rate by 0.25 to 0.5%.
• You are in an ARM about to reset. Locking a fixed rate before the adjustment is usually worth 1 to 2 percent of future rate risk.
• You hit 20% equity and want to drop PMI. Removing $150 to $300 per month in PMI can justify a refinance even with a slightly higher rate.
• You want to shorten the term. Going from a 30-year to a 15-year usually drops the rate 0.5 to 0.75% and saves $100,000+ in interest on a typical mortgage.

Car and Auto Loan Refinancing Is Different

An auto loan refinance calculator is simpler than a mortgage version because auto refinances have almost no closing costs. Most lenders charge $0 to $75 in title and lien reassignment fees, with no appraisal, no title insurance, and no origination fee. That changes the math in three important ways:

• Break-even is almost instant. With no closing costs, every dollar of monthly savings is real from month one. A 1% rate drop on a $25,000 auto loan saves about $12 per month with zero payback period.
• Rate drops matter more. Auto terms are short (36 to 72 months), so a rate cut has fewer months to compound. The refinance only makes sense if your rate drops 1% or more, or if your credit has improved substantially since you bought the car.
• Timing matters. Refinancing in the first 2 years of a 5-year loan captures most of the savings. Refinancing with only 18 months left on the loan rarely nets more than a few hundred dollars because most of the interest is already paid.

Common auto refinance scenario: a buyer financed a $28,000 car at 9.9% with fair credit. Two years later, credit score is 720 and rates for that score are 6.5%. On the $19,200 remaining balance over 36 months, the new payment drops from $590 to $589. Not worth it. But starting from a $28,000 balance at 9.9% with 54 months left, refinancing to 6.5% saves about $42 per month and $2,268 over the remaining term. That is worth the hour of paperwork.