Mortgage Refinance Calculator

Refinancing pays off when the total interest you save over your new amortization exceeds your prepayment penalty plus closing costs — the calculator's break-even month tells you exactly when the cumulative savings cross that combined cost. Generally, a meaningfully lower new rate combined with plans to stay in the home well past the break-even point is what makes refinancing worthwhile.

Breaking a mortgage before its term ends usually triggers a penalty of either three months' interest or an Interest Rate Differential (IRD), whichever is greater — IRD is generally higher on fixed-rate mortgages when rates have dropped. The exact IRD formula depends on your lender's posted rates and contract terms, so this calculator doesn't compute it automatically: pick "3 Months' Interest" for a rough estimate, or enter the exact figure your lender quotes under "Lender-Quoted Penalty" to see the full break-even analysis.

Refinancing typically involves legal fees, an appraisal, and possibly a discharge fee from your current lender — the calculator uses a default closing-cost estimate that you can adjust to match quotes from your own lender or lawyer.

It's the number of months of savings from your lower payment needed to fully recover the penalty and closing costs of refinancing. If you plan to sell or refinance again before reaching the break-even month, the refinance likely costs you money overall even though your monthly payment goes down.

Not automatically — you choose the new amortization period, and the calculator defaults it to your current remaining amortization so a like-for-like comparison is the starting point. Even at a lower rate, choosing a longer new amortization than your old mortgage had left can increase total interest paid over the life of the loan. The total-interest figures shown assume your entered rate holds for the full new amortization; they aren't a guarantee of what happens at your next renewal, when rates can change. Compare the new total interest figure against your current remaining interest to see the full picture.