Start by gathering some information from your latest mortgage statement, including your current monthly payment, remaining balance, and remaining loan term. You’ll enter these details in the calculator’s first few fields.

Next, enter the new loan details, such as the expected interest rate and loan term for the refinance. If you’re unsure about closing costs, you can estimate them based on average refinancing costs or consult a lender for a more precise figure. The calculator will then show key outputs, such as your new monthly payment, potential savings, and how long it will take to recoup the refinancing costs.

For example, if your closing costs are estimated at $5,200 and you’ll save $175 per month, you’ll break even in approximately 30 months, or two and a half years. If you plan to stay in your home beyond this break-even point, refinancing could be a beneficial option for you.