Interest Rate Cut Impact Calculator
Model savings and mortgage costs under rate cut scenarios. Fed minutes temper cuts — see your breakeven.
Fed minutes: no more cuts if inflation persists. Model your portfolio and mortgage under different rate scenarios.
Run Your Own Simulation
Adjust the inputs below. Results update instantly. No signup, no data saved — everything runs in your browser.
How We Calculate Impact
We use standard amortization formulas for mortgage payments. Monthly payment = Principal × (rate/12) × (1 + rate/12)^n ÷ ((1 + rate/12)^n − 1). Compare current rate vs new rate to show monthly and lifetime savings. Static formulas only — no APIs.
What Changes When Rates Drop
- Monthly payment — Lower rate = lower payment
- Total interest — Less paid over life of loan
- Refi breakeven — When savings exceed refinance costs
How do rate cuts affect my mortgage? A 1% drop on a $400K, 30-year loan can save $250+/month and $90K+ over the life of the loan. The calculator shows the exact numbers. Plug in your loan amount, current rate, and a hypothetical cut — see the dollar impact.
Scenario modeling for divided Fed views
The Fed is split: cuts if inflation cools, hold if it sticks. You can’t control the Fed. You can model “what if we get one cut? Two?” and plan accordingly. Refi now or wait? The calculator helps you decide.
The News Driving This Conversation
Fed minutes — no more cuts if inflation persists. Markets oscillate. Homeowners wonder: refinance now or wait? Use this calculator to model different rate scenarios. See your savings under 1, 2, or 3 cuts. Know the breakeven before you act.
What’s the Fed saying about rate cuts in 2026? Data-dependent. If inflation cools, cuts come. If not, rates stay higher for longer. The calculator doesn’t predict — it shows you the impact of any scenario you choose.
Breakeven charts
Refinancing costs money (closing costs, fees). When do savings exceed those costs? The calculator can show monthly savings — divide closing costs by monthly savings to get breakeven in months. Under 24 months? Usually worth it.
How to Interpret Your Results
Savings tiers for a typical $400K, 30-year loan:
| Rate cut | Monthly savings (est.) | Action |
|---|---|---|
| 0.5% | approx. $120 | Consider if refi costs low |
| 1% | approx. $250 | Often worth refi |
| 1.5%+ | approx. $380+ | Strong refi candidate |
Should I refinance if the Fed cuts rates? Run your numbers. If monthly savings exceed refi costs within 18–24 months, it’s usually a win. The calculator gives you the savings — you bring the refi cost and decide.
Who Should Use This Calculator
Homeowners — see mortgage savings under different rate scenarios. Plan refi timing.
Refinancers — compare current payment to new rate. Know your breakeven.
Rate-sensitive borrowers — anyone with variable debt. Model the impact of cuts (or hikes).
Financial advisors — show clients the dollar impact. Make rate moves tangible.
Know your savings before rates move
Don’t guess. Plug in your loan, your rate, and a hypothetical cut. In 30 seconds you’ll know exactly what you’d save. Then you can decide: act now or wait for the next Fed meeting.
Fixed vs adjustable rates
This calculator assumes fixed rates. If you have an ARM, rate cuts (or hikes) affect your payment directly. Model the impact of a 1% move — that’s often the cap per adjustment period. Same formula, different use case.
Closing costs and breakeven
Refi closing costs typically run 2–5% of loan amount. On $400K, that’s $8K–$20K. At $250/month savings, breakeven is 32–80 months. If you plan to stay 5+ years, refi often wins. The calculator gives you savings; you bring the closing cost — divide to get breakeven months.
Frequently Asked Questions
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