Mortgage Refinance Calculator
Should you refinance your mortgage? Enter your current and new loan details to instantly see your monthly savings, break-even point, and total interest saved over the life of the loan.
Should I Refinance My Mortgage?
Compare your current mortgage with a new one to see if refinancing makes financial sense.
Current Mortgage
New Mortgage
How the Refinance Calculator Works
Mortgage refinancing replaces your existing loan with a new one at a different rate or term. According to Freddie Mac research, refinancing typically makes financial sense when you can reduce your interest rate by at least 0.5-1%, your break-even point is under 24 months, and you plan to stay in the home past that break-even period.
Our calculator compares your current mortgage with a potential new one, accounting for closing costs, rate changes, and term differences. It calculates three key metrics:
- Monthly savings: The difference between your current payment and the new payment.
- Break-even point: How many months of savings it takes to recoup your closing costs — the most important metric for deciding whether to refinance.
- Lifetime savings: The total amount saved over the full life of both loans, including the impact of different loan terms.
The calculator automatically provides a recommendation based on industry standards: if the break-even is under 24 months with a rate reduction of 0.5% or more, refinancing is strongly recommended.
When Does Refinancing Make Sense?
- Rates dropped 0.5-1%+ below your current rate: Even a small rate reduction can save thousands over the life of the loan.
- Your credit score improved significantly: A better score qualifies you for lower rates, potentially saving you more than when you first got your mortgage.
- You want to switch from ARM to fixed: If you have an adjustable-rate mortgage and rates are rising, locking in a fixed rate provides payment stability.
- You need to access equity: A cash-out refinance lets you tap your home equity for renovations, debt consolidation, or major expenses.
- You can afford higher payments: Refinancing from 30 to 15 years dramatically reduces total interest, even at similar rates.
Frequently Asked Questions
When should I refinance my mortgage?
Consider refinancing when rates are at least 0.5-1% lower than your current rate, your credit score has improved, or you want to switch loan types. The break-even point should be shorter than how long you plan to stay in the home.
How much does it cost to refinance?
According to Bankrate and ICE Mortgage Technology data, refinancing typically costs 2-5% of the loan amount. On a $300,000 loan, expect $6,000-$15,000 in closing costs. Some lenders offer no-closing-cost options with a slightly higher rate.
What is a break-even point?
The break-even point is when your cumulative monthly savings equal the closing costs paid. If closing costs are $6,000 and you save $200/month, break-even is 30 months. Stay past this point for refinancing to be profitable.
Should I refinance to 15 or 30 years?
A 15-year term has lower rates and saves massively on interest but requires higher payments. A 30-year term maximizes monthly savings. Choose based on your budget and financial goals.
What is a cash-out refinance?
Cash-out refinancing replaces your mortgage with a larger one and gives you the difference in cash. Useful for home improvements or debt consolidation, but increases your loan balance.