AtlasCalcsUtility Calculation Suite
2026-09-23 7 min read

Refinance vs Keep Mortgage Calculator

Both mortgages totalled with break-even dated. Free calculator.

Calculator

Remaining Balance
$
Current Rate(%)
%
Years Left(years)
years
New Rate(%)
%
New Term(years)
years
Closing Costs
$

This housing choices calculator prices both paths on identical assumptions at full precision; the gap — not the stories — decides.

Results

Optimal

Cheaper Path

Refinance

Net $61,589.

Net Saving

$61,589

Monthly Saving

$256

Break-Even

23.4 months

Keep Total

$572,518

Refinance Total (incl. costs)

$510,929

Live results update as you type — currently showing cheaper path of Refinance. Replace the defaults with your own figures for an exact comparison.

Visualizations

Keep vs Refinance Totals

572,518Keep
510,929Refinance

Formula

Refinancing priced as totals plus the break-even date costs must be outlived.

Net = keep total − new total − costs; BE = costs ÷ monthly saving

Variables

SymbolNameUnitDescription
BEBreak-evenmonthsHold-past date

Explanation

This totals both mortgages and dates the break-even.

Step-by-Step Calculation

Follow each step to understand how the result is calculated from your inputs.

Step 1

Total the current loan to its end.

Keep = payment × remaining
Result: $572,518
Step 2

Total the new loan plus closing costs.

New = payment × term + costs
Result: $510,929
Step 3

Divide costs by monthly saving for break-even.

BE = costs ÷ monthly saving
Result: 23.4 months
Final Answer
Refinance

Worked Examples

See how the calculator works with different scenarios.

Scenario

The refinance vs keep mortgage calculator run on the values above, showing the full calculation path rather than only the answer.

Inputs

Remaining Balance:280000
Current Rate:7.5
Years Left:22
New Rate:6

Calculation

1. Total the current loan to its end. → $572,518 2. Total the new loan plus closing costs. → $510,929 3. Divide costs by monthly saving for break-even. → 23.4 months

Result

Cheaper Path: Refinance

Interpretation

Refinance 7.50% → 6.00%: $61,589 saved, break-even 23.4 months.

Understanding Your Result

Your Result: Cheaper Path: Refinance

What This Means

This totals both mortgages and dates the break-even.

Why It Matters

Refinance 7.50% → 6.00%: $61,589 saved, break-even 23.4 months.

Professional Interpretation

Refinance 7.50% → 6.00%: $61,589 saved, break-even 23.4 months.

How this is calculated

Refinancing priced as totals plus the break-even date costs must be outlived.

What drives the result

Renting buys shelter with no equity; buying buys shelter plus an appreciating asset minus interest, tax, maintenance and transaction costs. Short horizons favour renting (transaction costs dominate); long horizons favour buying (equity compounds). Refinancing only pays past break-even.

Recommendations

  • •Refinance only if you will hold past break-even.
  • •A shorter term at the same payment often beats a lower rate at full term.

Educational Content

Introduction

Housing is the largest comparison most people ever make: buy vs rent, mortgage vs rent, lease vs buy, refinance vs hold. The method never changes — total each path on identical horizons, subtract retained equity, and let the gap decide.

Concept Explanation

Renting buys shelter with no equity; buying buys shelter plus an appreciating asset minus interest, tax, maintenance and transaction costs. Short horizons favour renting (transaction costs dominate); long horizons favour buying (equity compounds). Refinancing only pays past break-even.

Applications

▸Buy-vs-rent at a real horizon
▸Refinance break-even timing
▸Lease-vs-buy on identical terms
▸Rent-growth stress tests

Benefits

  • •Equity-adjusted apples-to-apples
  • •Break-even dated precisely
  • •Rent growth compounded honestly
  • •Horizon-matched comparisons

Limitations

  • •Maintenance and transaction costs approximated
  • •Appreciation assumed smooth
  • •Mobility value unpriced
  • •Tax details (SALT, MID) simplified

Best Practices

  • •Match horizons to real plans
  • •Hold refinances past break-even
  • •Budget 1%/yr maintenance on owned homes
  • •Stress rent growth and rates both ways

Common Misconceptions

Myth: Rent is throwing money away
Truth: Interest, tax, maintenance and transaction costs are also “thrown”.
Myth: Refinancing always saves
Truth: Only past break-even with costs included.

Practical Tips

  • •Hold past break-even or don’t refinance.
  • •Consider shorter terms, not just lower rates.

Common Mistakes

Restarting 30 years repeatedly
Payment falls, lifetime interest soars.

Assumptions

This calculator makes the following assumptions to provide estimates:

No cash-out changes: Balance rolls cleanly.

Limitations

Be aware of these limitations when using this calculator:

Limitation: Maintenance and transaction costs approximated
Limitation: Appreciation assumed smooth
Limitation: Mobility value unpriced
Limitation: Tax details (SALT, MID) simplified

Frequently Asked Questions

Answers to common questions about this calculator.

The 1% rule — valid?
Crude: 1% rate drops usually (not always) clear costs. Run the totals instead.
Who uses the refinance vs keep mortgage calculator?
It is used by households pricing two paths on identical assumptions before committing. It sits in the Housing Choices group of the Specialized Personal Finance section of Atlascalcs.
How accurate is the refinance vs keep mortgage calculator?
Every figure follows directly from the inputs using standard mathematics for refinance decision calculations, so it is accurate to the quality of the values you enter. All calculations run at full precision and round only for display.
How do I make any comparison fair?
Identical horizons, rates and inclusions on both sides — change one variable at a time and stress the result.
Should taxes be included?
Yes wherever they differ between options — Roth vs traditional is nothing but tax timing.
Does rounding change the results?
Every calculation runs at full precision and rounds only for display.
What if I value flexibility over money?
Price the money first, then decide what the flexibility is worth to you — never skip the pricing.

Related Calculators

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Related Guides

Deepen your understanding with these educational resources.

Glossary

Technical terms used in mortgage calculations explained in plain language.

Break-even point
Where savings equal costs — hold past it or the change loses.
Present value
Future money discounted to today at a chosen rate.

Authoritative References

Trusted sources and standards referenced by this calculator.

Applicable Standards

Both options priced on identical horizons, rates and inclusionsEquity and retained assets credited to their sideTax timing at the entered brackets; future brackets assumedMoney rounded for display only; all calculations run at full precision

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Page Information

Last Updated:

2026-09-23

Version:

2.0.0

License:

Free to use for educational and professional purposes.