Should you refinance? Find your break-even point

Refinancing swaps your mortgage for a new one at today's rate, and the lender charges 2–6% of the loan in closing costs for the privilege. Whether that trade wins depends on one date: the month your accumulated monthly savings finally cover those costs. Stay past it and the refinance pays for itself; sell before it and you lost money on the deal. The Mortgage Refinance Calculator computes that date plus the number lenders skip, total interest over the life of both loans.

How it works

1. Current side: balance, rate, and years remaining from your statement.
2. New side: the quoted rate, the new term, and estimated closing costs.
3. Read three results: monthly savings, break-even month, and lifetime savings after costs.

The trap: lower payment, higher cost

Say you're 10 years into a 30-year loan and refinance the remaining balance into a fresh 30-year term. The payment drops twice: once from the rate, once from stretching the debt over more years. But those added years are interest-heavy, and total interest often goes up. The calculator flags this case explicitly: monthly savings positive, lifetime savings negative. Sometimes that trade is still right (cash flow matters), but you should make it knowingly.

A quick worked example

$300,000 at 7% with 25 years left costs $2,120 a month. Refinanced to 5.5% over the same 25 years, the payment falls to $1,842: $278 a month saved. With $5,000 in closing costs, break-even lands at month 18, and lifetime savings come to about $78,000. If you plan to move in a year, walk away; if this is your ten-year house, take the deal.

The Mortgage Refinance Calculator is free, runs locally, and never sends your data to a server. More finance calculators at maratool.com.