Mortgage Refinance Calculator
Calculate if refinancing makes financial sense. See monthly savings, break-even point, lifetime interest savings, and whether to refinance your mortgage.
Remaining balance on your current mortgage
Your current mortgage interest rate
Years left on your current mortgage
Interest rate for the refinanced loan
Term length for the new mortgage
Total closing costs for refinancing (typically 2-5% of loan)
Amount to cash out (optional, increases loan balance)
Whether to finance closing costs
When should I refinance my mortgage?
Refinance when: 1) Interest rates drop 0.75-1% or more below your current rate, 2) Your credit score improved significantly (100+ points), 3) You want to switch from ARM to fixed rate, 4) You need cash out for home improvements, 5) You want to remove PMI after reaching 20% equity. Don't refinance if: Closing costs exceed 2-3 years of savings, you're selling soon (within 5 years), or you're late in your loan term (last 10 years of 30-year mortgage).
What is the break-even point on a refinance?
Break-even point = Total Closing Costs / Monthly Savings. Example: $4,000 closing costs, save $150/month = 27 months to break even. If you plan to stay in your home longer than break-even, refinancing makes sense. Typical break-even is 2-3 years. Also consider: 1) Lifetime interest savings, 2) Lower monthly payment frees cash for investing, 3) Tax implications, 4) Building equity faster with shorter term.
Should I do a cash-out refinance or HELOC?
Cash-out refinance: Replace mortgage with larger loan, take difference in cash. Pros: Lower rate than HELOC, fixed payment, one loan. Cons: Resets loan term, closing costs 2-5%. HELOC: Second mortgage, line of credit. Pros: Pay interest only on what you use, lower/no closing costs, keep existing mortgage rate. Cons: Variable rate risk, shorter repayment (10-15 years). Use cash-out if rates dropped; use HELOC if rates increased or need flexibility.
What are typical refinancing closing costs?
Expect 2-5% of loan amount: Appraisal ($400-$600), origination fee (0.5-1% of loan), title insurance ($700-$1,500), credit report ($25-$50), recording fees ($50-$200), prepaid items (taxes, insurance escrow). On $300k loan: $6,000-$15,000 total. Options: 1) Pay upfront, 2) Roll into loan (increases balance), 3) No-closing-cost refinance (higher rate). Compare total cost over time for each option.