Mortgage Refinance Calculator

Refinancing pays off when the total interest you save over the new term 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 the lender charges — IRD is generally higher on fixed-rate mortgages when rates have dropped, since it's calculated on the difference between your old rate and the current rate over the remaining term. The calculator lets you model both penalty types.

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.

Yes — refinancing sets a new amortization period starting from the date of the new mortgage, so even at a lower rate, choosing a long new amortization can increase total interest paid over the life of the loan if the remaining term on your old mortgage was already shorter. Compare the new total interest figure against your current remaining interest to see the full picture.