Mortgage Refinance Calculator

How to use this calculator

1. 1

   Enter your details

   Fill in the required fields on the left.

2. 2

   Review the results

   See your calculated results on the right.

Frequently asked questions about Mortgage Refinance Calculator

How is my break-even point calculated for refinancing?

Your break-even point is calculated by dividing your total closing costs by your monthly payment savings. For example, if refinancing costs $5,000 and saves $200 per month, your break-even point is 25 months ($5,000 / $200 = 25). If you stay in the home longer than 25 months, refinancing saves you money.

What's the minimum rate drop that makes refinancing worthwhile?

A general rule of thumb is that refinancing makes sense if you can lower your rate by at least 0.75% to 1%. However, the calculator helps you determine the exact number based on your loan amount, closing costs, and time horizon. Sometimes a smaller rate drop is worthwhile if your loan amount is large or you plan to stay for a long time.

What closing costs are included in the refinance calculation?

The calculator includes all typical refinancing closing costs: application fees, appraisal fees, title search and insurance, attorney fees, recording fees, and prepaid interest. It also includes any discount points you might choose to pay. Total closing costs typically range from $3,000 to $8,000.

Should I refinance if I plan to move in a few years?

The calculator shows your break-even point. If your break-even point is longer than your expected time in the home, refinancing likely isn't worthwhile. For example, if you plan to move in 3 years (36 months) but your break-even is 48 months, you'll lose money on the refinance.

What's the difference between rate-and-term and cash-out refinancing?

Rate-and-term refinancing changes your interest rate or loan term (e.g., from 30-year to 15-year) without borrowing additional money. Cash-out refinancing replaces your mortgage with a larger loan, allowing you to receive cash at closing. The calculator can model both scenarios, showing you the costs and benefits of each.

How does changing from a 30-year to a 15-year mortgage affect my finances?

The calculator shows the significant interest savings of a 15-year loan, though monthly payments will be higher. For example, a $200,000 loan at 7% costs $1,331 monthly for 30 years but $1,688 for 15 years. While the payment is 27% higher, you'll save over $150,000 in interest and build equity much faster.

What's the impact of paying discount points in a refinance?

Discount points are prepaid interest that reduce your rate. Each point costs 1% of the loan amount and typically lowers the rate by 0.25%. The calculator shows the break-even point for buying points. If you stay in the home past the break-even, points save money; if not, they're a waste.

Do I need an appraisal to refinance?

Most conventional refinances require an appraisal to confirm your home's current value. The calculator includes appraisal costs ($300-$600). However, some refinance options (like FHA Streamline or VA IRRRL) may not require an appraisal, saving you this cost. The calculator can adjust for appraisal requirements.

What's the difference between a no-cost refinance and paying closing costs?

A no-cost refinance means the lender pays your closing costs in exchange for a higher interest rate. The calculator compares both options, showing the monthly payment difference and total cost over time. No-cost refinances make sense if you plan to move soon, but you'll pay more in interest over the long term.

Can I refinance if I have an FHA loan and want to remove PMI?

Yes, refinancing from an FHA loan to a conventional loan can eliminate FHA mortgage insurance if you have at least 20% equity. The calculator shows the savings from removing PMI (0.45-1.05% of loan amount annually) and helps you determine if refinancing makes sense based on the cost to switch loan types.

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