Mortgage Refinance Calculator
Calculate whether refinancing your mortgage makes sense. Compare your current loan against a new rate to see monthly savings, total interest savings, and break-even timeline.
Should You Refinance Your Mortgage?
Enter your current loan balance, rate, and remaining term alongside the new rate and closing costs. The calculator shows your monthly savings, total savings over the new loan term, and how many months until you break even on closing costs.
- Monthly payment change: New payment vs. current payment
- Break-even point: Months until closing costs are recovered from monthly savings
- Total interest savings: Cumulative interest difference over the full loan term
- Cash-out option: Model pulling equity out while refinancing
When Refinancing Makes Sense
- Rate drop of 1%+: The traditional rule of thumb — refinancing saves meaningfully when the new rate is at least 1 percentage point lower, though even 0.5% can be worth it on large balances
- Break-even under 3 years: If closing costs take longer than 3 years to recover via monthly savings, refinancing may not be worthwhile — especially if you plan to move
- ARM to fixed: If you have an adjustable-rate mortgage resetting to a higher rate, locking into a fixed rate provides payment certainty even without a lower rate
- Shortening the term: Refinancing from a 30-year to a 15-year at the same rate increases monthly payments but cuts total interest by 40–50%
Refinancing Costs to Include
- Origination fee: 0.5–1% of the loan amount — the lender's fee for processing the new loan
- Appraisal: $300–600 — required by most lenders to confirm the home's current value
- Title insurance and search: $500–1,500 depending on location
- Recording fees: $25–250 — government fees for recording the new deed of trust
- No-closing-cost refinance: Lenders may offer a slightly higher rate in exchange for covering closing costs — the calculator can model this by comparing the two rate scenarios
Frequently Asked Questions
How do I calculate my refinance break-even point?
Break-even = total closing costs ÷ monthly payment savings. Example: $5,000 in closing costs and $200/month savings → 25-month break-even. If you plan to stay in the home beyond 25 months, refinancing saves money. If you might sell or refinance again before then, it may not be worth it. The calculator automates this and also shows total interest savings over the remaining loan life.
Does refinancing restart my 30-year mortgage?
Only if you take a new 30-year term. You can refinance into any remaining term — if you have 22 years left, you can refinance into a 20-year or 15-year loan. Refinancing into a new 30-year on a loan you've paid for 8 years means you're paying for 38 years total, which may erase interest savings from the lower rate. Model the exact remaining term in the calculator to see the true comparison.
What credit score is needed to refinance?
Conventional refinances typically require a 620+ credit score; to get the best rates, aim for 740+. FHA refinances allow scores as low as 580. Your loan-to-value ratio (remaining balance ÷ home value) also matters — most lenders require at least 20% equity (80% LTV) for the best conventional rates. Check rates with 2–3 lenders to find the best offer for your credit profile.