Home Ownership
Calculate new monthly payments, interest savings, and break-even point on your refinance
Estimate potential savings with updated interest rates and extra payments
A mortgage refinance calculator helps homeowners evaluate whether refinancing their current mortgage makes financial sense. Refinancing means paying off your existing loan with a new one, often at a better interest rate or different term. This calculator compares your current mortgage payments and total costs against a new mortgage scenario, accounting for refinancing costs (origination fees, appraisal, title insurance, typically 2-5% of the loan amount). By calculating the breakeven point, you determine how many months you need to stay in the home for savings to outweigh refinancing costs. Refinancing can be beneficial for rate reduction, shortening loan terms, switching loan types, or accessing home equity.
The calculator requires your current loan details (balance, rate, remaining term) and proposed refinance details (new rate, new term, closing costs). It calculates both your current mortgage's remaining interest and your new mortgage's interest, then subtracts the new loan's interest from the current interest to find gross savings. After subtracting closing costs from this savings, you get net savings. Dividing monthly savings by closing costs reveals your breakeven period in months. If you plan to stay longer than the breakeven, refinancing is generally worthwhile.
Monthly Payment Savings = Current Monthly Payment - New Monthly Payment. Total Savings = (Gross Interest Reduction) - Closing Costs. Breakeven Months = Closing Costs ÷ Monthly Savings.
Refinancing closing costs typically range from 2-5% of the new loan amount and include origination fees (0.5-1.5%), appraisal ($300-500), title insurance, credit report, underwriting fees, and processing fees. For a $300,000 refinance, expect $6,000-15,000 in total costs. Some lenders offer no-cost refinances, but the cost gets rolled into your interest rate instead.
No-cost refinances are attractive but you'll pay via a slightly higher interest rate than you'd get with an upfront cost option. Run the numbers comparing both scenarios. If you plan to stay long-term and the rate improvement is substantial, no-cost makes sense. For short-term stays, the rate increase might not be worth the convenience.
If you refinance a 30-year mortgage midway through for another 30 years, yes—your equity building timeline resets. However, if you refinance into a shorter term (like 15 years) or continue paying extra principal on a new 30-year loan, you can accelerate equity building despite the refinance. The key is your personal payment commitment.
Rate-and-term refinancing changes your interest rate and/or loan term without borrowing additional money. Cash-out refinancing borrows against home equity, giving you cash while refinancing. Cash-out refinances typically have slightly higher rates because the lender has more risk. Only pursue cash-out if rates still offer savings after the higher rate adjustment.
