Comparison
Refinance vs keep current mortgage: comparing two paths
Compare estimated payments, remaining interest, and simple payment break-even for keeping a stated current loan versus refinancing under shared illustrative assumptions — not a lender quote.
- Published:
- Updated:
A refinance decision is often framed as keep the current loan or start a new one. This page holds balance, rates, terms, and closing costs fixed as illustrative assumptions, then shows both amortization paths from the same educational refinance model so the differences are visible side by side.
What differs
- Loan terms and rate: keep the stated current rate/remaining term versus a new assumed rate and term.
- Estimated monthly payment, remaining/new interest, closing costs treatment, and simple payment break-even applicability.
Illustrative scenario results
Illustrative assumptions (not market quotes): $280,000 balance, 6.75% current rate with 288 months remaining, refinance to 6.0% for 360 months, $3,500 closing costs paid out of pocket.
| Path | Term | Est. monthly payment | Est. interest |
|---|---|---|---|
| Keep current mortgage | 288 months | $1,965.80 | $286,150.10 |
| Refinance | 360 months | $1,678.74 | $324,346.93 |
- Payment difference (current − new): $287.06
- Interest difference (current remaining − new loan interest): -$38,196.83
- Closing costs (assumed out of pocket): $3,500.00
- Simple payment break-even: 12.2 months (approx.)
How to read these results
Under these illustrative assumptions, the refinance path changes the estimated monthly payment and the interest remaining on the new schedule relative to keeping the current loan for its remaining term. Closing costs enter only the simple payment break-even when the new payment is lower. The figures are scenario outputs — not a recommendation to refinance or to keep the loan.
When each approach may be useful to explore
These notes describe situations where comparing the paths can be informative. They are not recommendations.
- Keep current mortgage path: You want a baseline estimate of payment and remaining interest if the current fixed-rate loan continues under the stated remaining term.
- Refinance path: You want to inspect how an assumed new rate, term, and out-of-pocket closing costs change estimated payment and interest versus that baseline.
Run your own numbers
This page uses fixed illustrative assumptions. For estimates based on inputs you control, open the Mortgage Refinance Calculator.
Assumptions
- Balance, rates, remaining term, new term, and closing costs are illustrative assumptions — not lender quotes or market averages.
- Fixed-rate, fully amortizing loans with monthly payments.
- Closing costs are treated as paid out of pocket (not financed into the new principal).
- Taxes, insurance, PMI, points, and prepayment penalties are excluded unless included in closing costs by assumption.
Limitations
- Not approval, pricing, or advice.
- Simple payment break-even is incomplete as an economic analysis.
- Does not model ARM resets, escrow changes, or cash-out beyond replacing the stated balance.
Methodology
- One call to the mortgage refinance engine (CALCULATOR-SPECS §1) produces both the current-loan and new-loan amortization paths.
- Monthly payment uses standard amortization (zero-rate shortcut when rate is 0%).
- Break-even months = closing costs ÷ monthly payment savings when savings > 0; otherwise not applicable.
Data provenance
Scenario inputs are illustrative assumptions in this dataset. Keep vs refinance figures are computed by the mortgage refinance engine.
- Mortgage refinance methodology: docs/CALCULATOR-SPECS.md §1 (as of 2026-09-09)
- Scenario dataset: data/pseo/comparisons/refinance-vs-keep-current-mortgage.ts (as of 2026-09-09)
Assumed rates are not current market data. Re-run with your own inputs on the calculator page.