Mortgage Refinance Calculator

How This Mortgage Refinance Calculator Works

This mortgage refinance calculator compares your current mortgage with a possible new loan. It estimates the current principal and interest payment, the new principal and interest payment, monthly savings, refinance closing costs, break-even time, interest difference, and overall loan cost difference.

The calculator uses fixed-rate mortgage payment formulas and builds estimated payoff schedules for both the current loan and the new refinance loan. This helps show whether the refinance may lower your monthly payment, reduce interest, or simply stretch the loan over a longer period.

What the calculator includes

• Current mortgage payment estimate

• New refinance payment estimate

• Monthly savings comparison

• Break-even estimate based on closing costs

• New loan amount with optional financed closing costs

• Optional cash-out refinance amount

• Current remaining interest estimate

• New loan interest estimate

• Annual refinance comparison table

• CSV, PDF, and print options

When Refinancing May Make Sense

Refinancing may make sense when the new loan improves your situation enough to justify the closing costs. Some homeowners refinance to lower the monthly payment. Others refinance to reduce total interest, shorten the loan term, switch from an adjustable-rate mortgage to a fixed-rate mortgage, or access home equity through a cash-out refinance.

• Reason to Refinance: Lower monthly payment
  What to Compare: Compare current payment, new payment, closing costs, and break-even time.

• Reason to Refinance: Lower total interest
  What to Compare: Compare remaining interest on the current loan against interest on the new loan.

• Reason to Refinance: Shorter loan term
  What to Compare: Compare payment increase, payoff date, and interest savings.

• Reason to Refinance: Cash-out refinance
  What to Compare: Compare the new loan amount, monthly payment, and long-term cost of borrowing more.

• Reason to Refinance: Remove PMI or change loan type
  What to Compare: Compare total monthly payment, PMI, closing costs, and lender requirements.

Break-Even Point and Closing Costs

The refinance break-even point estimates how long it may take for monthly savings to recover refinance closing costs. For example, if closing costs are $4,500 and monthly savings are $300, the break-even point is about 15 months.

A shorter break-even period may be more attractive if you plan to stay in the home long enough to benefit from the refinance. If you sell or refinance again before reaching break-even, the refinance may not produce the expected savings.

Monthly Savings vs. Lifetime Loan Cost

A refinance can reduce your monthly payment while increasing your total loan cost. This often happens when a borrower replaces a mortgage with 20 or 25 years remaining with a new 30-year loan. The monthly payment may drop, but interest may be paid over a longer period.

That is why this calculator shows both monthly savings and loan cost difference. Monthly savings helps with cash flow. Loan cost difference helps show the broader long-term impact.

Rate-and-Term Refinance vs. Cash-Out Refinance

A rate-and-term refinance usually replaces an existing mortgage to change the interest rate, loan term, or monthly payment. A cash-out refinance increases the loan amount so the homeowner can receive cash at closing.

Cash-out refinancing can be useful in some situations, but it also increases mortgage debt. When using the cash-out field, remember that the new loan amount and total interest may rise because the refinance includes additional borrowed money.

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Mortgage Refinance Calculator FAQ

What does this refinance calculator estimate?

It estimates current payment, new payment, monthly savings, closing cost break-even time, current remaining interest, new loan interest, and the potential long-term cost difference.

How is the refinance break-even point calculated?

The break-even point is estimated by dividing refinance closing costs by monthly savings. If there are no monthly savings, the calculator shows that there is no monthly-savings break-even point.

Can refinancing lower my payment but cost more over time?

Yes. A refinance can lower the monthly payment while increasing total interest if the new loan has a longer term or if closing costs are added to the balance.

Should I compare the new loan term to my remaining term?

Yes. Comparing the remaining term on your current loan to the full term of the new loan helps show whether the refinance extends the payoff timeline.

What are refinance closing costs?

Refinance closing costs may include lender fees, appraisal fees, title charges, recording fees, prepaid items, and other loan-related expenses.

What happens if I roll closing costs into the new loan?

Rolling closing costs into the new loan increases the new loan amount. This may reduce cash needed at closing but can increase interest paid over time.

What is a cash-out refinance?

A cash-out refinance replaces the existing mortgage with a larger loan and gives the borrower cash at closing. This increases mortgage debt and may increase long-term interest cost.

Is this refinance calculator exact?

No. It provides estimates for planning and education. Actual refinance offers may vary because of lender rules, credit score, loan type, closing costs, escrow adjustments, taxes, insurance, and market rates.