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Printed August 17, 2026 · https://trycleartally.com/refinance-calculator
Estimates for educational purposes only — not financial advice. See https://trycleartally.com/disclaimer.
Mortgage Refinance Calculator
Compare your current mortgage to a new refinanced loan and see your monthly savings, lifetime interest savings, and the break-even point on closing costs.
Reviewed by the ClearTally editorial team · Last updated August 1, 2026 · Methodology & sources
Part of the mortgage calculators collection — 12 tools in the order most people need them.
Today's Rates
Sources: Federal Reserve Economic Data (FRED), Finnhub. For reference only — not a rate quote or investment advice.
Current loan
New loan
Prefilled with today's average 30-yr rate (FRED).
New payment
$1,801.21
Current payment
$1,962.53
Monthly savings
$161.32
Break-even on closing costs
31 months
Lifetime interest savings
$12,574
Current vs. refinanced balance
Refinance Comparison Worksheet
New monthly payment
$1,801.21
Calculated using the standard formulas described at https://trycleartally.com/methodology — for educational estimates only, not a quote or financial advice. Verify with your lender or financial institution before making decisions.
Should you refinance, or keep the mortgage you have?
Refinancing tends to make sense when the rate drop is meaningful, you plan to stay in the home well past the break-even month, and you can cover the closing costs without rolling them into the balance. The longer you hold the loan after break-even, the more the monthly saving compounds into real money.
Keeping your current mortgage tends to make sensewhen the rate improvement is small, you might sell or move before break-even, or you're well into the loan and refinancing to a fresh long term would reset your progress on principal. If the goal is simply to pay less interest, making extra principal payments on your existing loan — see the mortgage payoff calculator — avoids closing costs entirely.
A clear-cut case, for contrast with the example above:a $320,000 balance at 7% with 27 years left costs $2,201 a month. Refinancing to 5.75% over a fresh 30 years drops that to $1,867 — a saving of $334 a month, so $6,000 of closing costs is repaid in 18 months. Here the rate cut is large enough to win the long game too: total interest falls by roughly $41,000 despite adding three years back onto the term. Narrow that gap to 7% → 6.5% and the lifetime figure can flip to a loss while the monthly payment still drops. That's the trade the two numbers exist to expose.
None of this is advice about your situation — rates, fees, and how long you'll stay are yours to weigh. The calculator makes the trade-off visible; it doesn't make the call.
How it works
We calculate your current loan's payment from its balance, rate, and remaining term, then compare it to a new loan amortized at your chosen rate and term. Break-even is how many months of payment savings it takes to recoup your closing costs — the single most useful number here, because refinancing only pays off if you keep the loan longer than that.
This is a rate-and-term refinance: you keep the same balance and swap your loan for a new one at a different rate or term, chasing a lower payment or a faster payoff. A cash-outrefinance is different — it replaces your mortgage with a larger one and hands you the difference in cash, so the balance and usually the payment go up. This calculator carries your current balance into the new loan, so it answers the rate-and-term question directly; for a cash-out, add the cash you'd take to the balance before you compare.
Example: refinancing a $280,000 balance with 30 years remaining from 7.2% down to 6.2% (again over 30 years) saves roughly $185/month, so $5,000 in closing costs is recouped in about 27 months. Sell or refinance again before then and the move lost money, whatever the rate sheet said.
FAQ
It resets unless you specifically choose a shorter term. A refinance is a brand-new loan, so a 30-year refinance starts a fresh 30-year clock even if you were five years into the old mortgage — which is why the payment can fall even without much of a rate cut. The cost is hidden in the amortization: those five years were spent on the interest-heavy part of the schedule, and a new loan puts you back at the start of that curve. So you can pay more total interest at a lower rate than you would have by finishing the loan you had. That's why lifetime interest savings can come out negative here. Refinancing into a 15- or 20-year term avoids restarting the clock, if the higher payment fits.
No, and it's the single most useful thing to check. A lower payment can come from a genuinely better rate, or just from stretching the balance over a longer term — very different outcomes that look identical on your bank statement. Always read the lifetime-interest figure alongside the monthly one. If the payment drops but total interest rises, you're borrowing against your future self for near-term breathing room, which is sometimes exactly the right call and sometimes not.
They solve different problems. Refinancing lowers the required payment and, with a good enough rate, the interest — but it costs money up front and resets the term. Paying extra principal on your existing loan costs nothing, shortens the term, and cuts interest, but doesn't reduce your required monthly payment. If your rate is already decent and the goal is to be debt-free sooner, extra payments are often the cleaner move; if your rate is well above today's, a refinance can do both at once.
Typical refinance closing costs include lender fees, appraisal, title insurance, and recording fees — often 2%–5% of the loan amount. Your official Loan Estimate from the lender will have the exact figure; use that number here rather than a guess, since it drives the break-even math.
There's no magic number — an old rule of thumb said 1%, but what actually matters is whether your monthly savings recoup the closing costs before you'd sell or refinance again. A small rate drop on a large balance can beat a bigger drop on a small one. Enter your real closing costs above and let the break-even months answer it: if you'll keep the loan well past break-even, even a modest rate cut can pay off.
A rate-and-term refinance keeps your loan balance the same and just changes the rate or the term — the goal is a lower payment or a quicker payoff, and that's what this calculator compares. A cash-out refinance replaces your mortgage with a bigger one and gives you the difference as cash, which raises both the balance and usually the payment. To approximate a cash-out here, add the cash you'd take out to the current balance before comparing.