Refinance Calculator
See how much you could save by refinancing your mortgage and find your break-even point. Get instant, accurate results and download your free professional PDF report.
How to Use
- 1Enter your current loan balance, interest rate, and monthly payment.
- 2Enter the new interest rate and loan term being offered for refinancing.
- 3Enter the estimated closing costs for the refinance.
- 4Click Calculate to see your monthly savings, break-even point, and lifetime savings.
Example Calculation
Scenario: Current Balance: $280,000 | Current Rate: 7.5% | Current Payment: $1,957 | New Rate: 6.5% | New Term: 30 years | Closing Costs: $5,000
This example shows how different inputs affect your monthly payment. Your results will vary based on your specific numbers.
Frequently Asked Questions
Q1: When does it make sense to refinance?
Generally, refinancing makes sense if you can lower your interest rate significantly, reduce your monthly payment, or switch to a more stable loan type (like ARM to Fixed). A common rule of thumb is if you can lower your rate by at least 0.75% to 1%.
Q2: What is a break-even point in refinancing?
The break-even point is the time it takes for your monthly savings to cover the upfront closing costs of the refinance. For example, if closing costs are $4,000 and you save $200/month, your break-even point is 20 months.
Q3: How much do refinancing closing costs typically cost?
Closing costs usually range from 2% to 5% of the loan amount. They include application fees, appraisal fees, title insurance, and origination fees. Some lenders offer "no-closing-cost" refinances where the fees are rolled into the interest rate.
Q4: Does refinancing hurt your credit score?
Initially, yes. A hard credit inquiry and opening a new account can cause a small, temporary dip in your score. However, consistently making on-time payments on the new loan will typically restore and even improve your score over time.
Q5: Should I refinance to a 15-year or 30-year mortgage?
Refinancing to a 15-year loan usually offers a much lower interest rate and saves huge amounts of interest over time, but has higher monthly payments. Refinancing to a 30-year loan keeps payments lower but costs more in interest long-term.
This calculator provides estimates for informational purposes only. The savings and break-even points are based on assumptions that may not reflect your actual refinance terms or long-term financial situation. Consult a licensed mortgage professional before making financial decisions.