Refinance Savings Calculator
See how much you could save by refinancing your mortgage. Include penalty costs and calculate your break-even point.
Monthly Savings
See your payment reduction
Break-Even Analysis
When savings exceed costs
Net Savings
After penalty costs
Current Mortgage
New Mortgage
Use our Penalty Calculator to estimate this amount
Your Savings
Current Payment
$2,894
New Payment
$2,249
Monthly Savings
$645
Break-Even Point
When savings exceed penalty
12 months
*Estimates only. Actual savings may vary based on your situation.
Should You Refinance Your Mortgage?
Refinancing can save you thousands of dollars, but it's not always the right choice. Here's how to know if refinancing makes sense for your situation.
When Refinancing Makes Sense
✓ Good Reasons to Refinance
- • Rate drop of 0.5% or more
- • Consolidating high-interest debt
- • Accessing equity for renovations
- • Shortening your amortization
- • Switching from variable to fixed
✗ May Not Make Sense
- • Small rate difference (<0.25%)
- • Close to renewal date
- • High penalty costs
- • Planning to sell soon
- • Extending amortization significantly
The Break-Even Calculation
The break-even point tells you how long it takes for your monthly savings to exceed the costs of refinancing (penalties, legal fees, appraisal). If you plan to stay in your home longer than the break-even period, refinancing likely makes financial sense.
Break-Even Formula:
Total Costs ÷ Monthly Savings = Months to Break Even
Example: $8,000 penalty ÷ $645/month savings = 12.4 months
Debt Consolidation Through Refinancing
One of the most powerful uses of refinancing is consolidating high-interest debt. Credit cards charging 19-24% and lines of credit at 7-10% can be rolled into your mortgage at 4-5%, dramatically reducing your overall interest costs.
However, be cautious: while your monthly payments will decrease, you're spreading that debt over a longer period. The total interest paid over time could actually be higher if you don't make extra payments.
Frequently Asked Questions
Ready to Start Saving?
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