Refinance Calculator

How to use this calculator

Enter your current loan details — balance, remaining term, and interest rate — and the proposed refinance details — new rate, new term, and estimated closing costs. The calculator compares the monthly payment under each scenario, calculates your monthly savings from refinancing, and divides total closing costs by that monthly savings to find the break-even point: the number of months until the refinance pays for itself.

Closing costs on a refinance typically run 2–5% of the loan amount. On a $300,000 balance, that's $6,000–$15,000. Some lenders offer "no-closing-cost" refinances that roll fees into the rate instead — those tend to make sense only if you plan to move or refinance again within a few years.

What your result means

The break-even point is the most important number this calculator produces. If you'll stay in the home longer than the break-even period, the refinance saves money over time. If you might sell, move, or refinance again before then, you'll likely spend more in closing costs than you recoup in monthly savings.

A commonly cited rule of thumb is that a refinance makes sense if you can lower your rate by at least 1%. That's a reasonable starting filter, but the break-even calculation is more precise — a 0.5% rate drop might be worth it on a large balance with low closing costs and a long remaining horizon; a 1.5% drop might not be worth it if you're moving in two years.

What the math leaves out

This calculator compares monthly payments and total interest but doesn't fully account for resetting your amortization clock. If you're 10 years into a 30-year mortgage and refinance to a new 30-year loan, you've extended your payoff by 10 years. Even if the monthly payment drops, you may pay more total interest over the life of both loans combined. Refinancing to a 20-year term (matching the time remaining) avoids this trap but increases the monthly payment relative to a 30-year refinance.

Cash-out refinancing: a different calculation

A cash-out refinance replaces your current mortgage with a larger loan, with the difference paid to you in cash. It's a way to access home equity — often used for renovations, debt consolidation, or large expenses. The trade-off: you're borrowing more against the home, extending your loan, and potentially resetting to a higher rate. Use a refinance calculator for the rate comparison, but separately evaluate whether using home equity for the intended purpose makes sense given the risk it puts on the asset.

Frequently asked questions

How often can I refinance my mortgage?
There's no legal limit on how often you can refinance, but most lenders have a seasoning requirement — typically 6–12 months from the last refinance or original mortgage before they'll approve a new one. Refinancing too frequently can also trigger prepayment penalties on some loans and repeatedly resets your amortization, which increases total interest paid over the long run.

Does refinancing hurt my credit score?
Applying for a refinance triggers a hard inquiry, which can temporarily lower your score by a few points. Multiple mortgage inquiries within a 14–45 day window (depending on the credit scoring model) are typically treated as a single inquiry for rate-shopping purposes. The long-term credit impact of a refinance is usually neutral or positive if you continue making payments on time.

What is a streamline refinance?
FHA and VA loans offer streamline refinance programs that reduce documentation requirements and often waive appraisals, making the process faster and cheaper. They're designed to help borrowers lower their rate without a full underwriting process. If you have an FHA or VA loan, ask your servicer whether a streamline refinance is available — it can shorten break-even significantly compared to a standard refinance.

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