Mortgage Refinance Calculator: Break-Even and Lifetime Cost
Enter your current mortgage balance, rate, and remaining term alongside the proposed new rate, new term, and closing costs. The calculator shows both monthly payments side by side, how many months until you recover the closing costs, and — critically — the true lifetime interest comparison. When a longer new term hides a higher overall cost, the tool flags it plainly so you can decide with clear numbers rather than just a lower monthly figure.
Current loan
New loan
Monthly savings
+$268.55
$1,419.47 vs $1,688.02 / month
Current payment
$1,688.02
300 mo remaining
New payment
$1,419.47
360 mo new term
Break-even
15 months
You recover closing costs in 15 months
Lower payment, higher lifetime cost
Extending the term costs $8,604.73 more overall. Your monthly payment is lower, but you pay more interest over the life of the new loan — even after accounting for the rate reduction.
Current total interest
$256,405.37
New interest + closing
$265,010.10
Lifetime delta
-8,604.73
Refinancing costs this much more in total (after closing costs)
Total interest comparison
How it works
The break-even point is how long it takes for your cumulative monthly savings to cover the closing costs you pay upfront. If you plan to stay in the home longer than that point, refinancing improves your cashflow; if you move before break-even, you spend more than you save. Enter your realistic timeline and compare it to the break-even number — that one comparison answers most refinancing questions.
A lower payment does not always mean a lower cost. When you refinance into a longer term — say, restarting a 30-year mortgage after ten years of paying down a 30-year loan — your monthly payment can drop substantially while the total interest you pay climbs sharply. The calculator shows a 'lifetime delta': the difference between what you would have paid in remaining interest on your current loan and what the new loan will cost, closing costs included. If that number is negative, you are paying more in total, even though each cheque is smaller.
Closing costs typically include lender origination fees (0.5–1% of the loan), an appraisal ($300–$600), title insurance and settlement fees ($500–$1500), and prepaid items such as homeowners insurance and pre-paid interest. The total commonly runs 2–5% of the loan balance. Entering a realistic figure is essential: underestimating closing costs makes the break-even look better than it is.
Frequently asked questions
When is refinancing worth it?+
Refinancing makes financial sense when two conditions hold: you will stay in the home past the break-even point, and the lifetime delta is positive (meaning you pay less interest overall than you would on your current loan). The break-even calculation is straightforward — divide closing costs by monthly savings. What is often overlooked is the lifetime view: if you have already paid down several years of a 30-year mortgage and reset to a new 30-year loan, the lower rate may not compensate for the extra years of interest. Run both numbers before deciding.
Should I reset to a 30-year term?+
Usually only if the rate drop is large enough to offset the extra years. Resetting your term extends the period over which interest accrues against your balance. For example, a homeowner with 10 years left on a 5% mortgage who refinances into a new 30-year loan at 4% will see their monthly payment fall by hundreds of dollars — but will pay roughly 2.5 times more in total interest than if they had kept the original loan. The break-even point may also be misleadingly short because the monthly savings look large. The 'lifetime delta' field in the results answers this directly: a negative value means you are paying more in total, regardless of the monthly saving.
Do I need an appraisal to refinance?+
Most conventional refinances require a full appraisal, which typically costs $300–$600 and is included in closing costs. Some lenders offer appraisal waivers for borrowers with strong equity and clean payment histories, particularly through automated valuation programs. Government-backed streamline refinances (FHA, VA, USDA) often waive the appraisal requirement entirely. Whether you need one affects your closing costs figure — adjust the input accordingly to get an accurate break-even estimate.