Refinance savings calculator
A lower monthly payment is not the same question as saving money overall. This calculator compares the total interest on your current loan against a new one, closing costs included, for the real lifetime answer.
$2,253/mo now, $1,970/mo after refinancing
Refinancing costs $6,000 upfront.
- •You save $283 every month on your payment, so it takes about 22 months of those savings to pay back the $6,000 closing cost. Every month you stay in the loan after that point, you keep the savings instead.
- •Add up every payment for the rest of the loan, monthly savings minus the $6,000 closing cost, and refinancing comes out $14,802 ahead over the life of the loan.
| Metric | Current loan | New loan |
|---|---|---|
| Loan amount | $320,000 | $320,000 |
| Interest rate | 7.25% | 6.25% |
| Years to pay it off | 27 | 30 |
| Monthly payment | $2,253 | $1,970 |
| Interest owed from today forward | $410,108 | $389,306 |
| Closing costs to get there | $0 | $6,000 |
A longer new term can lower your monthly payment while still costing more in total interest, so the interest owed from today forward and the monthly payment in this table are answering different questions on purpose.
A free account keeps your numbers ready across every calculator, no re entering them each time.
How this calculator works
- Step 1Enter both loans
Your current balance, rate, and years left, plus the new rate, term, and closing costs.
- Step 2See both paths charted
Cumulative interest for staying put versus refinancing, side by side, year by year.
- Step 3Get the net number
Total lifetime savings or cost, closing costs already factored in.
Frequently asked questions
How is this different from a regular refinance calculator?
A basic refinance calculator usually answers "what is my new monthly payment." This one answers a different question, "how much do I actually save or lose in total interest over the full remaining life of both loans," which can point to a different conclusion, especially when the new term is longer than the years left on your current loan.
Why might refinancing lower my payment but still cost more overall?
Refinancing into a fresh 30 year term restarts the amortization clock, even at a lower rate, so you are paying interest over more months than you had left on your current loan. The monthly payment can drop while the total interest paid over the full loan actually rises, this tool is built specifically to catch that.
What counts as the "life of the loan" in this comparison?
For your current loan, it is however many years you have left. For the new loan, it is the full new term you enter. The chart lines up both timelines from today so the total interest comparison is apples to apples, not just a snapshot of next month's payment.
Does this include closing costs in the final number?
Yes, the net lifetime savings figure subtracts your entered closing costs from the total interest difference, so it reflects what you actually keep, not just the gross interest comparison before costs.
What should I do if the numbers are close either way?
When the lifetime numbers are close, other factors matter more, how long you actually plan to stay in the home, whether you want a shorter term regardless of total interest, and your comfort with the monthly payment either way. The math here is one clear input, not the only one.
More refinancing calculators
Compare your current payment to a new rate and term, and see the break even point.
Your new payment after rolling extra cash into a new mortgage, and whether there is a real break even.
Same mortgage, two ways to refinance it. See what taking cash out really costs you each month.
Every number on this page is a planning estimate, for informational and educational purposes only, not professional advice.
Before you act on any major decisions, consult a qualified accountant, tax advisor, or financial advisor who knows your full picture.