Understanding the refinance calculator
A refinance replaces your existing mortgage with a new one, usually to get a lower rate, a different term, or cash out of home equity. Because refinancing costs real money in fees, the key number is the break-even point: how many months of payment savings it takes to earn back the closing costs. If you might sell or refinance again before break-even, the deal loses money no matter how attractive the rate looks.
Watch the term reset. Refinancing 25 remaining years into a fresh 30-year loan lowers the payment partly by stretching the debt, which can raise total interest even at a lower rate. Comparing lifetime interest as this calculator does keeps the payment drop from hiding that cost.
Results are estimates for education only and are not financial advice.