Mortgage Refinance Calculator
Calculate a mortgage and compare to an existing mortgage.
Home & Housing · Last reviewed: September 11, 2026
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Overview
The Mortgage Refinance Calculator calculates a proposed fixed-rate mortgage and compares it with an existing fixed-rate mortgage. It shows the change in principal-and-interest payment, interest through an expected holding period, break-even timing, and full-term interest.
The result is a planning comparison, not a payoff quote, loan offer, qualification decision, or recommendation to refinance. Positive net benefit values favor refinancing; the payment-difference output uses a separate convention in which a positive value means a higher proposed monthly expense.
Scope and Use
Use this calculator to compare an existing fully amortizing, fixed-rate mortgage with a proposed fully amortizing, fixed-rate, rate-and-term refinance. The holding period can represent the time until a planned sale, another refinance, or another comparison date.
Review both the holding-period and full-term results. A longer new term can lower the monthly payment while increasing total interest, so a favorable result at one horizon does not guarantee a favorable result at another.
Outside this model
- Adjustable-rate mortgages, mortgage insurance, extra payments, recasting, and interest-only or balloon loans.
- Cash-out or cash-in refinancing and changes to principal other than financed refinance costs.
- Property taxes, homeowners insurance, escrow, prepaid interest, and escrow deposits.
- Tax effects, inflation, investment opportunity cost, and the timing value of cash paid at closing.
- Appraisal or loan-to-value rules, available pricing, borrower qualification, underwriting, and lender approval.
Inputs and Outputs
The table follows the accepted calculator contract. Monetary results are calculated and returned to cents; the interactive results display currency as whole dollars.
| Field | Format | Meaning | Interpretation |
|---|---|---|---|
| Current loan balanceinput | Currency | The unpaid principal balance of the existing mortgage. | Enter unpaid principal, not a payoff quote containing accrued interest or fees. |
| Current annual rateinput | Percentage per year | Fixed annual interest rate on the existing mortgage. | Enter the fixed note rate, not APR. |
| Current remaining term (months)input | Whole months | Number of monthly payments remaining. | Allowed range: 1 through 12,000 monthly payments. |
| New annual rateinput | Percentage per year | Fixed annual interest rate on the proposed refinance. | Enter the proposed fixed note rate, not APR. |
| New loan term (months)input | Whole months | Number of scheduled monthly payments for the refinance. | Allowed range: 1 through 12,000; the term does not need to be a whole number of years. |
| Refinance costsinput | Currency | Net incremental loan and third-party costs for the proposed refinance after lender credits. | Exclude payoff principal, prepaid interest, and escrow deposits. Include an applicable prepayment penalty when appropriate for the comparison. |
| Cost payment methodinput | Cash or Financed | Whether refinance costs are paid in cash or added to the proposed loan principal. | Financed costs increase proposed principal and its interest; entered costs are deducted from benefit under either method. |
| Holding period (months)input | Whole months | The comparison horizon measured in scheduled monthly payments after closing. | Must be at least 1 and cannot extend beyond the later loan payoff month. |
| Monthly payment differenceoutput | Currency | Proposed principal-and-interest payment minus the current principal-and-interest payment. | Positive means increased monthly expense; negative means decreased. Displayed as whole dollars. |
| Net benefit at holding periodoutput | Currency | Current-loan interest minus proposed-loan interest through the holding period, less refinance costs. | Positive favors refinancing. This is an interest-and-cost comparison, not a discounted cash-flow result. |
| Break-even periodoutput | Month number or no break-even | The first month cumulative interest savings equal or exceed refinance costs. | Zero costs break even at month 0. No qualifying crossover is displayed as “No break-even within comparison period.” |
| Current monthly paymentoutput | Currency | The scheduled principal-and-interest payment for the existing mortgage. | Taxes, insurance, escrow, and mortgage insurance are excluded. |
| Proposed monthly paymentoutput | Currency | The scheduled principal-and-interest payment for the proposed refinance. | Financed refinance costs are included in proposed principal. |
| Current-loan interestoutput | Currency | Interest from the existing mortgage schedule through the holding period. | — |
| Proposed-loan interestoutput | Currency | Interest from the proposed mortgage schedule through the holding period. | — |
| Current remaining interestoutput | Currency | Total scheduled interest remaining over the existing mortgage's remaining term. | — |
| Proposed total interestoutput | Currency | Total scheduled interest over the proposed refinance term. | — |
| Full-term net benefitoutput | Currency | Current remaining interest minus proposed total interest and refinance costs. | Positive favors refinancing. A longer proposed term can make this negative even when the holding-period result is positive. |
- Field
- Current loan balanceinput
- Format
- Currency
- Meaning
- The unpaid principal balance of the existing mortgage.
- Interpretation
- Enter unpaid principal, not a payoff quote containing accrued interest or fees.
- Field
- Current annual rateinput
- Format
- Percentage per year
- Meaning
- Fixed annual interest rate on the existing mortgage.
- Interpretation
- Enter the fixed note rate, not APR.
- Field
- Current remaining term (months)input
- Format
- Whole months
- Meaning
- Number of monthly payments remaining.
- Interpretation
- Allowed range: 1 through 12,000 monthly payments.
- Field
- New annual rateinput
- Format
- Percentage per year
- Meaning
- Fixed annual interest rate on the proposed refinance.
- Interpretation
- Enter the proposed fixed note rate, not APR.
- Field
- New loan term (months)input
- Format
- Whole months
- Meaning
- Number of scheduled monthly payments for the refinance.
- Interpretation
- Allowed range: 1 through 12,000; the term does not need to be a whole number of years.
- Field
- Refinance costsinput
- Format
- Currency
- Meaning
- Net incremental loan and third-party costs for the proposed refinance after lender credits.
- Interpretation
- Exclude payoff principal, prepaid interest, and escrow deposits. Include an applicable prepayment penalty when appropriate for the comparison.
- Field
- Cost payment methodinput
- Format
- Cash or Financed
- Meaning
- Whether refinance costs are paid in cash or added to the proposed loan principal.
- Interpretation
- Financed costs increase proposed principal and its interest; entered costs are deducted from benefit under either method.
- Field
- Holding period (months)input
- Format
- Whole months
- Meaning
- The comparison horizon measured in scheduled monthly payments after closing.
- Interpretation
- Must be at least 1 and cannot extend beyond the later loan payoff month.
- Field
- Monthly payment differenceoutput
- Format
- Currency
- Meaning
- Proposed principal-and-interest payment minus the current principal-and-interest payment.
- Interpretation
- Positive means increased monthly expense; negative means decreased. Displayed as whole dollars.
- Field
- Net benefit at holding periodoutput
- Format
- Currency
- Meaning
- Current-loan interest minus proposed-loan interest through the holding period, less refinance costs.
- Interpretation
- Positive favors refinancing. This is an interest-and-cost comparison, not a discounted cash-flow result.
- Field
- Break-even periodoutput
- Format
- Month number or no break-even
- Meaning
- The first month cumulative interest savings equal or exceed refinance costs.
- Interpretation
- Zero costs break even at month 0. No qualifying crossover is displayed as “No break-even within comparison period.”
- Field
- Current monthly paymentoutput
- Format
- Currency
- Meaning
- The scheduled principal-and-interest payment for the existing mortgage.
- Interpretation
- Taxes, insurance, escrow, and mortgage insurance are excluded.
- Field
- Proposed monthly paymentoutput
- Format
- Currency
- Meaning
- The scheduled principal-and-interest payment for the proposed refinance.
- Interpretation
- Financed refinance costs are included in proposed principal.
- Field
- Current-loan interestoutput
- Format
- Currency
- Meaning
- Interest from the existing mortgage schedule through the holding period.
- Interpretation
- —
- Field
- Proposed-loan interestoutput
- Format
- Currency
- Meaning
- Interest from the proposed mortgage schedule through the holding period.
- Interpretation
- —
- Field
- Current remaining interestoutput
- Format
- Currency
- Meaning
- Total scheduled interest remaining over the existing mortgage's remaining term.
- Interpretation
- —
- Field
- Proposed total interestoutput
- Format
- Currency
- Meaning
- Total scheduled interest over the proposed refinance term.
- Interpretation
- —
- Field
- Full-term net benefitoutput
- Format
- Currency
- Meaning
- Current remaining interest minus proposed total interest and refinance costs.
- Interpretation
- Positive favors refinancing. A longer proposed term can make this negative even when the holding-period result is positive.
Methodology
The calculator builds one amortization schedule for the existing loan and one for the proposed loan. Closing is month 0. Month N is measured immediately after N scheduled end-of-month payments.
P is loan principal, r is the annual percentage rate converted to a decimal monthly rate, and n is the number of monthly payments.
C is the entered refinance cost. Financing affects proposed principal and therefore proposed interest, but the entered cost is also deducted once in each benefit measure.
A positive difference means the proposed payment is higher; a negative difference means it is lower.
Positive benefit values favor refinancing. Interest stops accumulating after a loan pays off. The full-term measure applies the same equation using each complete schedule.
L is the later payoff month. If the set is empty, the result is no break-even. With zero refinance costs, break-even is month 0. A first crossover can later reverse when the proposed term is longer.
Each schedule calculates monthly interest from the remaining balance, rounds interest and principal to cents, and adjusts the final payment to clear the remaining balance. Interest outputs are sums from these same cents-rounded schedules. Principal, entered costs, and returned currency values are retained to cents even though the interactive result cards display whole dollars.
Assumptions and Limitations
Model assumptions
- Both loans are fixed-rate and fully amortizing.
- The current balance is unpaid principal immediately before the next scheduled payment, not a payoff quote.
- Refinance costs are net incremental costs after lender credits and exclude payoff principal, prepaid interest, and escrow deposits.
- Results are nominal and undiscounted.
Interpretation limits
- Net benefit compares scheduled interest and entered refinance costs; it is not a complete cash-flow or investment analysis.
- Break-even uses cumulative interest savings rather than cumulative monthly-payment differences.
- Actual statements and payoff quotes can differ because of payment timing, accrued interest, fees, servicer methods, and contract terms.
- This calculator does not determine whether refinancing is available, suitable, affordable, or approved.
Selected Sources
- Mortgages Key Terms
Consumer Financial Protection Bureau · Retrieved September 10, 2026
Refinance, fixed-rate mortgage, amortization, closing-cost, mortgage-term, principal, and payoff-amount terminology, including the warning that a lower payment may result from a longer term.
Reviewed September 10, 2026
- Compare and Negotiate Your Loan Offers
Consumer Financial Protection Bureau · Published December 12, 2024 · Retrieved September 10, 2026
Comparing principal-and-interest payments, upfront loan costs, lender credits, and interest and fees over a relevant time horizon.
Page last modified December 12, 2024
- Mortgage Refinance Calculator
Fannie Mae · Retrieved September 10, 2026
General refinance-comparison framing, term tradeoffs, and the distinction between paying refinance fees upfront and rolling them into the proposed loan.
Reviewed September 10, 2026