Refinance Calculator
Compare your current mortgage to a refinanced loan.
Result
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The Refinance Calculator compares your current mortgage with a new refinanced loan, showing monthly savings, the break-even point, and lifetime interest savings. Determine whether refinancing makes financial sense given closing costs and your timeline.
Examples
Rate Reduction Refinance
Current: $250,000 balance at 7% with 25 years remaining ($1,767/mo). New: 5.5% for 30 years ($1,419/mo). Monthly savings: $348. With $5,000 closing costs, break-even in ~15 months.
Cash-Out Refinance
Current balance $200,000. Refinance for $230,000 at a lower rate, take $30,000 cash for home improvements. The new payment may be similar but you access equity.
Frequently Asked Questions
What is the break-even point?
The break-even point is how many months of savings it takes to recoup the closing costs. After break-even, you begin to truly save money from the refinance.
Should I refinance to a longer term?
It depends on your goals. A longer term lowers monthly payments but may increase total interest. If cash flow is a priority, a longer term helps. If minimizing total cost matters more, keep the term short.
What is a cash-out refinance?
A cash-out refinance replaces your existing mortgage with a larger loan, giving you the difference in cash. It is a way to access home equity but increases your debt.
Result
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Quick Tips
- •A common rule of thumb: refinance if you can reduce your rate by at least 0.5-1%.
- •Consider the break-even period. If you plan to move before break-even, refinancing may not be worth it.
- •Extending the term lowers payments but may increase total interest paid.
- •Cash-out refinancing increases your loan balance and total interest.
- •Shop multiple lenders to find the best rate and lowest closing costs.