Refinance calculator
Does refinancing pay off, and when? Compare your current mortgage with a new rate and term at today's average rates, see the month you come out ahead counting everything, and check points, cash-out and lender quotes side by side.
Quick answer: Refinancing $388,862 still owed at 7.875% into a new 30-year loan at today's 7.24% Freddie Mac average, with $6,000 of closing costs, lowers the payment by $250 a month and pays for itself after 31 months. Because the 30 years start again, it costs $20,343 more over the life of the loan.
By John Crane, MBA & the Editorial Team · Updated for the 2026 tax year. How we check our numbers
Monthly payment savings
$250.19
$2,900.28 now, $2,650.09 after. Ahead after 31 months, but it costs $20,343 more over the full term.
| Current payment | $2,900.28 | 52.3% |
|---|---|---|
| New payment | $2,650.09 | 47.7% |
- New loan amount
- $388,862
- Cash at closing
- $6,000
- Simple break-even
- 24 months
- True break-even
- 31 months
- Lifetime cost
- +$20,343
- Interest left, current loan
- $550,827
When refinancing pays off
Net position, counting balance owedWays to refinance
| Option | Payment | Paid off | Interest | Total paid vs current loan |
|---|---|---|---|---|
| 30-year loan as entered | $2,650 | Oct 2056 | $565,170 | +$20,343 |
| Keep your payoff date | $2,736 | Oct 2053 | $497,532 | -$47,295 |
| Keep paying your current payment | $2,900 | Oct 2049 | $409,179 | -$135,649 |
| 15-year loan at 6.60% | $3,409 | Oct 2041 | $224,726 | -$320,102 |
Remaining balance
Simple break-even divides the cash you pay at closing by the monthly saving. True break-even also counts the loan balance: a new 30-year loan lowers the payment partly by spreading what you owe over more years, so it takes longer to really come out ahead. Taxes and insurance stay the same either way and are left out.
How this is calculated
Payments and balance
Your current balance comes from the original loan's payment schedule (or your statement). The new loan is that balance plus any cash out, plus closing costs and points if you roll them in; points are a percent of the final loan. Payments are principal and interest only.
Two break-evens
Simple break-even is cash paid at closing divided by the monthly saving. True break-even is the first month when payments made, cash paid and the balance still owed add up to less with the new loan than with the old one, which counts the cost of restarting the term.
Lifetime cost
All remaining payments on the new loan plus cash at closing, less the remaining payments on the current loan and any cash you take out. The 15-year option uses the Freddie Mac 15-year average rate.
Sources
Related guides
- Is refinancing worth it? How to find your break-evenHow to weigh closing costs against monthly savings, when a lower rate does not pay off, and how term, cash-out and time in the home change the answer.
Questions
How much lower should the rate be to refinance?
There is no fixed rule; it depends on your closing costs, your balance and how long you will keep the loan. Compare the true break-even month above with the number of years you expect to stay: if you will keep the loan well past it, the refinance likely pays.
Should I roll closing costs into the new loan?
Rolling them in means no cash at closing, but you pay interest on the costs for the life of the loan and borrow more. Switch Pay costs to compare both ways.
Are discount points worth paying?
Points lower the rate in exchange for cash up front, roughly 0.25% per point. They pay off only if you keep the loan longer than the points break-even shown, often five years or more.