This refinance calculator estimates the new monthly payment after you roll closing costs into the balance. Enter current balance, new rate, new term in months, and closing costs. Payment = PMT(principal + closing, new rate, new months).
Homeowners use it when a lower rate quote arrives and they need a quick payment check. For a standard mortgage payment without refinance framing, use the mortgage calculator. Fee context lives on the closing costs calculator.
How the formula works
Financed amount is balance plus closing costs. The payment uses monthly rate = new_rate÷100÷12 over the new month count. Higher financed amount or rate raises payment. Longer terms usually lower payment but can raise total interest.
Worked example
Balance $280,000, closing $4,000, new rate 5.5 percent, new term 360 months. Financed = $284,000. New payment ≈ $1,612.52.
| Input | Value |
|---|---|
| Current balance | $280,000 |
| Closing costs | $4,000 |
| New rate | 5.5% |
| New term | 360 months |
| New payment | ~$1,612.52 |
How to use the fields
- Current balance is what you still owe before the refinance.
- New rate and new months describe the replacement loan.
- Closing costs are fees you finance in this model.
- Old rate and old months help you compare, not redefine the primary payment.
Payment versus total cost
A lower payment can still cost more interest if you restart a long term. Map remaining months on the old loan against the new schedule before you celebrate the monthly drop.
Break even thinking
If you pay closing costs in cash instead of financing them, your cash outlay differs from this default model. Either way, divide upfront cost by monthly savings for a rough months to break even, then add a buffer for moving plans.
Common mistakes
- Ignoring that a new 30 year term resets amortization
- Forgetting prepaid interest or escrows outside this P&I figure
- Comparing a teaser rate to a fully indexed payment
- Skipping credit and appraisal conditions that can change the quote
Decision checklist
- Confirm the balance the lender will refinance.
- Get a written fee list for closing costs.
- Run payment at the quoted rate and term.
- Compare total interest and how long you will keep the home.
When refinancing may not help
If you will sell soon, fees may outweigh savings. If the rate cut is tiny after costs, keeping the current loan can be cleaner. A recast discussion is another path on some servicers; Multicalify also hosts a mortgage recast calculator.
Cash out versus rate and term refinance
Cash out increases principal and can erase payment savings from a lower rate. Model the new balance after cash out as the principal input. If you only want a lower rate, keep principal near the current payoff quote.
Some borrowers refinance to shorten the term. Payment may rise even when the rate falls. That can still be rational if interest savings and debt free dates matter more than monthly cash flow.
Points and lender credits
Paying points lowers the note rate but raises upfront cost. Lender credits can reduce cash to close while raising the rate. This calculator’s closing cost field can approximate financed fees, but point buy downs deserve a side by side quote comparison from the lender.
Ask whether quoted payments include escrow. This page’s primary result is amortizing principal and interest on the modeled balance.
Credit, appraisal, and timing risk
Application fees are wasted if the appraisal or credit decision changes the deal. Lock periods matter when rates move. Keep a backup plan to stay in the current loan if underwriting slips past your lock.
Break even worked thinking
Suppose the old payment was higher than the new $1,612.52 style result by $300. Rough months to recover $4,000 of costs would be about 14 months before other factors. If you might move in a year, fees may not pay back. If you will keep the home for a decade, payment savings have more time to matter.
Include the chance that you refinance again later, which can restart fee clocks.
Limitations
Results omit PMI changes, discount points nuances, and cash out effects beyond the inputs you enter. Final numbers come from your Loan Estimate. Use a general loan calculator if you want payment math without refinance labels.