Refinance Calculator
Should you refinance? Compare your current mortgage to a new one and see if refinancing makes financial sense. Calculate your potential monthly savings, break-even point, and total interest saved over the life of your loan.
Your Current Loan
Remaining principal on your mortgage
New Loan Details
Rate you expect to qualify for
Typically 2-5% of loan amount
Extra cash to take out of equity
Weigh the costs and benefits carefully
Monthly Savings
+$322
per month
Break-Even Point
19 months
Lifetime Savings
-$17,413
Closing Costs: $6,000 •Total Loan: $300,000
Analysis & Insights
Reducing your rate by 1.00% is a significant improvement that will save you money over the life of the loan.
You'll save $322 every month, which adds up to $3,860/year.
You'll recoup your closing costs in just 19 months.
Extending your loan term by 5 years may increase total interest paid.
After all costs, refinancing may cost you $17,413 more over the life of the loan.
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Get My QuoteUnderstanding Refinancing
Refinancing replaces your current mortgage with a new loan, typically to get a lower interest rate, change your loan term, or access your home equity. Here's what you need to know:
When Does Refinancing Make Sense?
- Lower interest rates available: A general rule is that refinancing makes sense if you can reduce your rate by at least 0.5-1%.
- You plan to stay in your home: You need to stay long enough to recoup closing costs through monthly savings (the break-even point).
- Your credit has improved: Better credit scores can qualify you for significantly lower rates.
- You want to change your loan term: Switch from a 30-year to a 15-year mortgage to pay off your home faster, or extend your term to lower monthly payments.
Key Terms to Understand
- Break-even point: The number of months it takes for your monthly savings to equal your closing costs. After this point, you're saving money.
- Closing costs: Fees to process the new loan, typically 2-5% of the loan amount. These include appraisal, title insurance, and origination fees.
- Cash-out refinance: Borrowing more than you owe to receive the difference in cash. Useful for home improvements or debt consolidation.
- Rate-and-term refinance: Simply replacing your current loan with better terms, without taking cash out.
Tips for a Successful Refinance
- Check your credit score: Higher scores get better rates. Consider improving your credit before applying.
- Compare multiple lenders: Rates and fees vary significantly. Get quotes from at least 3 lenders.
- Consider no-closing-cost options: Some lenders offer to roll closing costs into your loan or increase your rate slightly to cover them.
- Time it right: Market rates fluctuate. Lock in your rate when you find a good deal.