Mortgage Refinance Calculator

Mortgage refinancing means replacing your existing home loan with a new one, typically to secure a lower interest rate, reduce monthly payments, shorten the loan term, or access home equity via cash-out refinancing. The new loan pays off your old mortgage, and you start making payments on the new terms.

The break-even point is the number of months it takes for your monthly savings to recoup the upfront closing costs of refinancing. For example, if you spend $6,000 in closing costs and save $200/month, your break-even is 30 months. If you plan to stay in your home beyond that point, refinancing is likely worthwhile.

You should plan to stay in your home at least until you've passed the break-even point. If you move or sell before then, you'll have spent more on closing costs than you recovered in savings. Most financial advisors suggest a break-even of 2–3 years or less is a good target.

Refinancing closing costs typically range from 2% to 5% of the loan amount. On a $250,000 loan, that's $5,000–$12,500. Common costs include an appraisal fee, title insurance, origination fees, and prepaid interest. Some lenders offer 'no-closing-cost' refinances, which roll the fees into the loan balance or a slightly higher rate.

Lenders generally require a credit score of at least 620 (higher for better rates), a debt-to-income ratio below 43–50%, at least 20% home equity for the best rates (though FHA and VA loans have different thresholds), and a stable income and employment history. An appraisal may be required to verify the current value of your home.

Discount points are upfront fees paid to the lender in exchange for a lower interest rate — each point equals 1% of the loan amount. Paying points can make sense if you plan to stay in the home long enough to break even on the upfront cost. Use the calculator to compare scenarios with and without points.

A cash-out refinance lets you borrow more than your current mortgage balance and pocket the difference as cash. For example, if you owe $200,000 but your home is worth $350,000, you could refinance for $250,000 and receive $50,000 in cash. This increases your loan balance and monthly payment, but can be useful for home improvements, debt consolidation, or other large expenses.

Yes, refinancing typically resets your loan term. If you refinance a 30-year mortgage after 5 years into a new 30-year loan, you're now on the hook for another 30 years of payments. To avoid extending your repayment timeline, consider refinancing into a shorter term (e.g., 15 or 20 years), even if your monthly payment is similar.