Mortgage Refinance Calculator
Calculate your refinance savings with current rates. Compare rate-and-term vs cash-out refinancing and find your break-even point with detailed cost analysis.
Calculate Your Refinance Savings
Use our specialized calculator to compare your current mortgage with new refinance options and determine if refinancing makes financial sense.
Refinance Savings Calculator
Compare current mortgage with refinance options
Ready to Calculate
Enter your current loan details and new rate above
Refinance Types Comparison
Rate-and-Term Refinance
Lower Rate or Change Terms
Benefits
- Lower monthly payments
- Reduce total interest
- Change loan term
- Switch to fixed rate
Drawbacks
- Closing costs required
- Restart loan term
- May extend payoff date
Best For:
Homeowners with rates 0.5-1% higher than current market rates
Cash-Out Refinance
Access Home Equity
Benefits
- Access cash from equity
- Potentially lower rate than HELOC
- Single monthly payment
- Tax-deductible for improvements
Drawbacks
- Higher rates than rate-and-term
- Higher closing costs
- Reduces home equity
- Restart loan term
Best For:
Homeowners needing large amounts for improvements, debt consolidation, or investments
Cash-In Refinance
Pay Down Principal
Benefits
- Best rates available
- Lower LTV ratio
- No PMI required
- Lower monthly payments
Drawbacks
- Requires significant cash
- Closing costs
- Opportunity cost of cash
Best For:
Homeowners with excess cash wanting to reduce mortgage payments significantly
FHA Streamline Refinance
Simplified FHA Refi
Benefits
- No appraisal required
- Minimal documentation
- Lower closing costs
- Faster processing
Drawbacks
- FHA loans only
- MIP still required
- Limited cash out
Best For:
Current FHA borrowers wanting to reduce rates with minimal hassle
Key Refinance Decision Factors
Interest Rate Difference
Compare current rate to new rate
Considerations:
- Traditional rule: 2% difference minimum
- Modern rule: 0.75-1% difference may make sense
- Consider loan balance and remaining term
- Factor in closing costs and break-even time
Recommendation:
Calculate break-even point to determine if savings justify costs
Time in Home
How long you plan to stay
Considerations:
- Break-even period typically 2-5 years
- Moving before break-even loses money
- Consider job stability and family plans
- Market conditions may affect decision
Recommendation:
Only refinance if staying past break-even point
Closing Costs
Upfront costs to refinance
Considerations:
- Typically 2-5% of loan amount
- Include appraisal, title, origination fees
- Can sometimes roll into loan balance
- Shop lenders for best cost structure
Recommendation:
Get detailed cost breakdown from multiple lenders
Current Equity Position
Home value vs. loan balance
Considerations:
- Need 20%+ equity for best rates
- Lower equity means higher rates/costs
- PMI removal at 20% equity saves money
- Cash-out reduces equity further
Recommendation:
Wait for more equity if currently under 20%
Refinance Closing Costs Breakdown
| Cost Item | Typical Cost | Required? | Negotiable? |
|---|---|---|---|
| Appraisal Fee | $400-$800 | Usually | No |
| Origination Fee | 0.5-1% of loan | ||
| Title Insurance | $500-$1,500 | ||
| Credit Report | $25-$50 | No | |
| Flood Certification | $15-$25 | If applicable | No |
| Recording Fees | $50-$250 | No | |
| Attorney Fees | $500-$1,000 | Some states | |
| Prepaid Interest | Varies | No |
Real-World Refinance Scenarios
Rate Reduction: 7.5% to 6.5%
Current Mortgage
New Mortgage
Analysis
Good refinance - breaks even in 2.5 years
Cash-Out: $50,000 for Home Improvements
Current Mortgage
New Mortgage
Analysis
Consider if improvements add value and rates are favorable
Mortgage Refinance FAQ
When should I refinance my mortgage?
Consider refinancing when current rates are 0.75-1% lower than your existing rate, you plan to stay in the home past the break-even point (typically 2-5 years), your credit has improved significantly, or you need cash from home equity for improvements or debt consolidation.
What is the difference between rate-and-term and cash-out refinancing?
Rate-and-term refinancing changes your interest rate or loan term without taking cash out - the new loan amount equals your existing balance plus closing costs. Cash-out refinancing lets you borrow against home equity, receiving cash at closing but resulting in a larger loan balance.
How much does it cost to refinance a mortgage?
Refinancing typically costs 2-5% of the loan amount in closing costs. For a $300,000 loan, expect $6,000-$15,000 in costs including appraisal ($400-800), origination fees (0.5-1% of loan), title insurance ($500-1,500), and other fees. Some costs are negotiable.
How do I calculate if refinancing is worth it?
Divide total closing costs by monthly payment savings to find your break-even point in months. For example, $6,000 in costs ÷ $200 monthly savings = 30 months to break even. Refinancing is worthwhile if you plan to stay in the home longer than the break-even period.
Can I refinance if I have less than 20% equity?
Yes, but options are limited. You may qualify for FHA streamline refinancing, VA IRRRL (if you have a VA loan), or conventional refinancing with PMI. Rates and terms may be less favorable. Consider waiting until you reach 20% equity for the best options.
Should I refinance to a 15-year mortgage?
Refinancing to a 15-year mortgage offers significant interest savings and faster payoff, but higher monthly payments. It's ideal if you can afford higher payments and want to pay off your home faster. Consider your cash flow, retirement timeline, and other financial goals.
Additional Refinance Tools
Ready to Start Your Refinance?
Use our calculators to determine potential savings, then shop with multiple lenders to find the best rates and terms.