Mortgage Refinance Calculator

Determine if refinancing makes financial sense

Current Mortgage
New Loan Terms
Refinance Analysis
Current Monthly: $0.00
New Monthly: $0.00
Monthly Savings: $0.00
Breakeven Point: 0 months
5-Year Savings: $0.00

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When Should You Refinance?

Refinancing makes sense when you can reduce your interest rate by at least 0.5-1%, plan to stay in the home long enough to recoup closing costs, or need to change loan terms (shorter payoff, lower payment, switch from ARM to fixed).

This calculator helps you determine the breakeven point—how long it takes for monthly savings to cover closing costs. Only refinance if you'll stay in the home beyond that point.

How to Use This Calculator

Step 1: Enter your current mortgage balance, rate, and remaining term.
Step 2: Input your current monthly payment (principal + interest).
Step 3: Enter the new interest rate you're considering.
Step 4: Select new loan term.
Step 5: Add estimated closing costs ($3,000-8,000 typical).
Step 6: Click "Calculate Refinance" to see analysis.

Understanding Breakeven Analysis

The breakeven point is when cumulative monthly savings equal closing costs. After this point, you start saving real money.

  • Breakeven under 24 months: Usually a good deal.
  • Breakeven 24-36 months: Consider if you'll stay 5+ years.
  • Breakeven over 36 months: Questionable unless rates drop further.

Also consider the long-term cost—a 30-year refinance resets the clock, potentially adding years of payments even with a lower rate.

Who Should Consider Refinancing?

  • Rate Droppers – when rates fall 0.5% or more below your current rate.
  • ARM Holders – switching from adjustable to fixed before rates rise.
  • Equity Builders – removing PMI after reaching 20% equity.
  • Cash-Out Needers – tapping home equity for major expenses.
  • Term Changers – going from 30 to 15 years for faster payoff.

Refinancing Cautions

  • Don't chase small rate drops—costs may exceed savings.
  • Extending your term can cost more despite lower payments.
  • Consider how long you'll stay in the home.
  • Factor in all closing costs, not just the rate.
  • Don't repeatedly refinance—costs add up over time.

Frequently Asked Questions

How much should rates drop to make refinancing worth it?
General rule: 0.5-1% rate reduction. However, it depends on loan size and closing costs. On a $350,000 loan, a 0.75% drop saves about $200/month—$2,400/year. With $5,000 closing costs, you'd breakeven in just over 2 years.
What are typical closing costs for refinancing?
Expect 2-5% of loan amount: loan origination (0.5-1%), appraisal ($400-600), credit report, title insurance, recording fees, attorney fees, and prepaid items (taxes, insurance). On a $300,000 loan, budget $6,000-15,000.
Should I refinance to a 15-year or 30-year term?
15-year loans have lower rates (typically 0.5-0.75% less) and build equity faster, but payments are 40-50% higher. Choose 15-year if you can comfortably afford it. Choose 30-year for payment flexibility with option to pay extra.
Can I refinance with bad credit?
Possible but challenging. FHA streamline refinances require less documentation. Conventional loans typically need 620+ credit. Improve your score before applying if possible—even a 20-point increase can mean better rates.
How long does refinancing take?
Typically 30-45 days, but can range from 15-60 days depending on lender volume, appraisal scheduling, and complexity. Rate locks are usually 30-60 days. Start the process when rates favor you.
Should I pay points when refinancing?
Paying discount points (1% of loan = ~0.25% rate reduction) makes sense if you'll keep the loan long enough to recoup the cost. Calculate: Points Cost Ă· Monthly Savings = Months to Breakeven. Beyond that point is profit.
Can I refinance without closing costs?
"No-cost" refinances roll closing costs into the loan balance or charge a higher rate. You're still paying—you just don't pay upfront. Compare the lifetime cost of both options. True no-cost is rare.
Is cash-out refinancing a good idea?
Cash-out refinances (borrowing more than you owe) are useful for home improvements, debt consolidation, or major expenses. However, they increase your loan balance and reduce equity. Use cautiously and for value-adding purposes.
How often can I refinance?
No legal limit, but practical limits exist. Lenders may require seasoning periods (6-12 months) between refinances. Each refinance costs money and resets amortization. Frequent refinancing can cost more than it saves.
Should I refinance if I plan to move soon?
Probably not. If your breakeven is 24 months and you're moving in 12, you'll lose money. Only refinance if you'll stay long enough to recover costs and capture meaningful savings.
What's the difference between rate-and-term vs cash-out refinance?
Rate-and-term refinancing changes your interest rate, loan term, or both without increasing balance. Cash-out refinancing increases your loan balance to access equity. Rate-and-term typically has better rates and lower fees.
Can I remove PMI through refinancing?
Yes! If your home value has increased or you've paid down enough to reach 20% equity, refinancing can eliminate PMI. This is a common and financially smart reason to refinance even without a rate reduction.