Refinance Calculator

Current Loan Balance ($)

Current Interest Rate (%)

Remaining Term (years)

New Interest Rate (%)

New Loan Term (years)

Closing Costs ($)

Typically 2-5% of loan amount

Disclaimer

Results are estimates for informational purposes only. Actual loan terms, rates, and payments may vary based on your credit score, income, and other factors. Please consult a licensed financial advisor or mortgage professional before making any financial decisions.

What is Refinance Calculator?

Refinancing replaces your current mortgage with a new loan, typically to get a lower interest rate, reduce monthly payments, or change the loan term. This calculator helps you determine if refinancing makes financial sense by comparing your current loan costs with potential savings from a new loan, accounting for closing costs and the breakeven period.

How to Use

Enter your current mortgage balance (what you still owe).
Input your current interest rate and remaining loan term.
Enter the new interest rate you could get by refinancing.
Choose your preferred new loan term.
Add estimated closing costs (typically 2-5% of loan amount).
Click Calculate to see if refinancing saves you money.

Why Use This Tool?

Understand if refinancing will actually save you money

Calculate the breakeven period to know when savings begin

Compare different loan terms and their impact on savings

Account for closing costs in your decision

See monthly and total interest savings clearly

Make informed decisions about your mortgage

Tips & Best Practices

A rate drop of 1% or more often makes refinancing worthwhile
Shorter loan terms save more interest but have higher payments
Closing costs typically take 2-3 years to recoup
Consider how long you plan to stay in the home
Refinancing resets your loan term - you may pay longer
Shop multiple lenders for the best rate and lowest closing costs

Frequently Asked Questions

When should I consider refinancing?

Refinance when interest rates drop significantly (typically 1%+ below your current rate), your credit score has improved, you want to change your loan term, or you need to remove PMI. Always calculate if savings outweigh closing costs within your expected time in the home.

What are typical refinancing closing costs?

Closing costs range from 2-5% of the loan amount ($4,000-$12,500 on a $250,000 loan). They include appraisal, title insurance, loan origination fees, and other processing costs. Some lenders offer 'no-closing-cost' refinancing with slightly higher rates.

How is the breakeven period calculated?

Breakeven = Closing Costs / Monthly Savings. If closing costs are $5,000 and you save $200/month, breakeven is 25 months. You start truly saving after 25 months. If you plan to move before breakeven, refinancing may not be worth it.

Should I refinance into a shorter term?

Shorter terms (15-year) have higher payments but save dramatically on interest. On a $250,000 loan at 6%, a 15-year term saves about $100,000 in interest vs 30 years, but monthly payments are about $600 higher. Choose based on your budget and goals.

What about cash-out refinancing?

Cash-out refinancing lets you borrow more than your current balance and receive the difference in cash. It's useful for home improvements or debt consolidation, but increases your loan balance and total interest. Consider carefully if it aligns with your financial goals.

How does my credit score affect refinancing?

Better credit scores get lower rates. A score above 740 typically gets the best rates. Scores below 680 may have higher rates or difficulty qualifying. Improving your score before refinancing can save thousands over the loan term.