Refinance Calculator
Calculate refinance savings, break-even point, and compare refinancing vs. staying. Free and instant.
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Refinance Analysis
Frequently Asked Questions
Should I refinance my mortgage?
Refinancing makes sense if: (1) You can lower your interest rate by 0.5-1% or more, (2) You plan to stay in the home long enough to recoup closing costs (break-even point), (3) You can reduce your loan term, or (4) You need to change loan terms. Use this calculator to compare costs and savings.
What is the break-even point?
The break-even point is how many months it takes for your monthly savings to equal the closing costs. If you plan to stay in the home longer than the break-even period, refinancing typically makes financial sense.
What are typical refinance closing costs?
Closing costs typically range from 2-5% of the loan amount ($4,000-$10,000 for a $200,000 loan). They include: origination fees, appraisal, title insurance, recording fees, and prepaid items. Some lenders offer no-closing-cost refinances with higher rates.
Can I refinance with bad credit?
It's possible but more difficult and expensive. You'll likely get higher interest rates and may need a larger down payment. Work on improving your credit score first to get better rates. FHA and VA loans may have more lenient requirements.
Should I refinance to a shorter term?
Refinancing to a shorter term (e.g., 30 to 15 years) increases monthly payments but saves significant interest and builds equity faster. Only do this if you can comfortably afford the higher payment. This calculator shows the impact of different terms.
What's a cash-out refinance?
A cash-out refinance replaces your current mortgage with a larger loan, giving you cash from the difference. This increases your loan balance and monthly payment. Use cash-out only for investments that will provide returns greater than the mortgage rate.
Introduction
Refinancing your mortgage can save thousands of dollars in interest, lower your monthly payment, or help you pay off your loan faster. However, refinancing isn't always the right choice—it depends on your situation, goals, and how long you plan to stay in your home.
This free refinance calculator helps you evaluate whether refinancing makes financial sense. It calculates your potential monthly savings, break-even point (when savings equal closing costs), and total savings over the life of the loan.
Use this tool to compare different refinance scenarios, understand the true cost of refinancing, and make an informed decision about whether to refinance your mortgage.
How to Use the Refinance Calculator
Follow these steps to evaluate refinancing options:
- 1
Enter Current Loan Details
Input your current mortgage balance, interest rate, and remaining loan term. These are your baseline for comparison.
- 2
Enter New Loan Terms
Enter the new interest rate and loan term you're considering. Compare different scenarios to find the best option.
- 3
Enter Closing Costs
Input estimated closing costs for the refinance. Typical costs are 2-5% of loan amount. Your lender will provide exact figures.
- 4
Review Refinance Analysis
See your new monthly payment, monthly savings, break-even point, and total savings. Compare to decide if refinancing makes sense.
When Refinancing Makes Sense
Lower Interest Rate: If you can reduce your rate by 0.5-1% or more, refinancing typically saves money, especially if you plan to stay in the home long enough to recoup closing costs.
Shorter Loan Term: Refinancing to a shorter term (e.g., 30 to 15 years) increases monthly payments but saves significant interest and builds equity faster.
Change Loan Type: Switching from adjustable-rate to fixed-rate provides payment stability, or vice versa if rates are favorable.
Remove PMI: If your home value has increased, refinancing can eliminate private mortgage insurance (PMI) if your loan-to-value ratio drops below 80%.
Tips & Best Practices for Refinancing
1. Calculate the Break-Even Point
Only refinance if you plan to stay in the home longer than the break-even period. If you're moving soon, closing costs may outweigh savings.
2. Shop Multiple Lenders
Compare rates and closing costs from multiple lenders. Even small rate differences can save thousands over the life of the loan.
3. Consider No-Closing-Cost Refinances
Some lenders offer no-closing-cost refinances with slightly higher rates. This can make sense if you don't plan to stay long-term, as you avoid upfront costs.
4. Don't Extend Your Term Unnecessarily
While extending your term lowers monthly payments, it increases total interest paid. Only extend if you need lower payments and understand the long-term cost.
5. Factor in All Costs
Include all closing costs: origination fees, appraisal, title insurance, prepaid items. These can add up to 2-5% of your loan amount.
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