Mortgage Refinance Comparator
A lower rate isn't automatically a good deal. Compare your current loan against a refinance: new payment, monthly savings, breakeven month, and total interest saved over the time you'll actually stay.
The two loans
The verdict
- Pay $558 less each month ($2,956 → $2,398).
- Break even on the $8,000 in closing costs in month 17 (Mar 2028).
- Come out $30,124 ahead if you stay 7 yr.
You're stretching 25 remaining years into a 30-year loan. The payment drops partly because you're paying principal 60 months slower — not just because the rate is lower. Lifetime interest still falls ($486,789 → $463,353) thanks to the rate cut, but the extra years eat most of the gain.
Savings over time
Cumulative net savings versus staying put — counting both payment savings and the difference in remaining balance. It starts $8,000 underwater from closing costs, crosses zero at break-even, and the tail shows what the extra years cost you.
Side by side
| Current loan | Refinanced | |
|---|---|---|
| Monthly payment | $2,956 | $2,398 |
| Up-front cost | $0 | $8,000 |
| Lifetime interest | $486,789 | $463,353 |
| Paid off in | 25 yr | 30 yr |
| Net cost over 7 yr | $598,130 | $568,007 |
Net cost = payments made + balance still owed (+ closing costs on the refinance). The difference between the two columns is your net savings above.
How the math works
The breakeven point is closing costs divided by monthly savings: how many months of lower payments it takes to earn back what you paid to refinance. If you sell or move before breakeven, the refinance lost you money — which is why the comparison is capped at the shorter of your planned stay and your current loan's remaining term.
A lower payment does not always mean a cheaper loan. Refinancing into a longer term (say, 25 years remaining into a fresh 30) restarts the amortization clock: early payments are mostly interest again. You can pay less per month and still pay more total interest. Compare total cost over your horizon, not just the monthly number.
This model treats closing costs as cash paid at closing. If your lender rolls them into the new balance, the true cost is slightly higher (you pay interest on the fees too) — add the fees to the balance input to approximate that.
Common questions
What is a good breakeven point for a refinance?+
Shorter is better, and it must be comfortably inside how long you'll actually keep the loan. A 2–3 year breakeven with a 7+ year stay is a clear win. A 6-year breakeven when you might move in 4 is a gamble — one relocation turns a 'saving' into a loss.
Can refinancing to a lower rate still cost me more?+
Yes — the classic trap is extending the term. Dropping from 7% with 20 years left to 6% on a new 30-year loan lowers your payment but restarts amortization, so you may pay more total interest. Always compare total cost over the time you'll actually hold the loan, which is what this tool does.
What about 'no-closing-cost' refinances?+
There's no free lunch — the lender covers closing costs by charging a slightly higher rate instead. Model it by setting closing costs to $0 and bumping the new rate up ~0.125–0.25%. It can still win if you won't stay long enough to recoup normal closing costs.
Should I refinance into a 15-year loan?+
If the payment fits your budget, it's often the best deal: lower rates than 30-year loans and far less lifetime interest. The risk is cash-flow rigidity — a 15-year payment is much higher, so keep an emergency fund. Compare the total-cost lines, not just the rate.