Refinance Calculator Mortgage Online
Refinance Calculator
Loan Comparison Calculator
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- Remaining balance is greater than $0
- Monthly payment is greater than $0
- Interest rate is valid
- Loan terms are realistic
- Monthly payment can actually pay off the loan
Refinancing replaces your current mortgage with a new loan, typically to get a lower rate, reduce monthly payments, or change the loan term. Whether a refi makes financial sense depends on how much you save each month versus the closing costs you pay upfront. This calculator runs that comparison so you can see your breakeven point and total savings.
How Refinance Savings Work
When you refinance, you pay closing costs (usually 2-5% of the loan amount) to lock in a new rate. The monthly savings from the lower rate eventually recover those costs. The month when cumulative savings exceed closing costs is your breakeven point. If you plan to stay in the home longer than that, refinancing puts money in your pocket.
Breakeven (months) = Closing Costs / Monthly Payment Reduction Total Savings = (Monthly Reduction × Remaining Months) - Closing Costs
If you plan to move before the breakeven month, refinancing costs more than it saves.
When Refinancing Makes Sense
The old rule of "only refi if rates drop 1%" is outdated. What matters is your specific breakeven and how long you plan to stay. A 0.5% rate drop can still be worthwhile if you are staying 10 more years. Conversely, a 1.5% drop is not worth it if you are moving in 18 months and breakeven is 24 months away.
| Scenario | Worth Refinancing? |
|---|---|
| Rate drops 0.5%, staying 10 years | Likely yes |
| Rate drops 1%, moving in 1 year | Likely no |
| Switching 30yr to 15yr at same rate | Depends on cash flow |
| Cash-out refi for home improvements | Evaluate ROI separately |
Cash-Out Refinancing
A cash-out refi lets you borrow more than your current balance and receive the difference in cash. This resets your loan term and typically raises your rate slightly. It can make sense for major renovations or consolidating high-rate debt, but it increases your total interest paid if not handled carefully.
Frequently Asked Questions
How much does refinancing cost?⌄
Closing costs typically run 2-5% of the loan amount. On a $300,000 loan that is $6,000-$15,000. Some lenders offer no-closing-cost refis where costs are rolled into the rate instead. This avoids upfront cash but means you pay more interest over the life of the loan.
Does refinancing hurt your credit score?⌄
A hard inquiry from the application will temporarily lower your score by a few points. Multiple mortgage inquiries within a 14-45 day window are usually treated as one inquiry by scoring models, so shopping multiple lenders in a short period does minimal damage.
Can I refinance with bad credit?⌄
Most conventional refinances require a 620+ credit score. FHA streamline refinances can be done with lower scores if you already have an FHA loan. VA streamline refinances (IRRRL) have no minimum score requirement from VA, though lenders may set their own standards.
What is a rate-and-term refinance?⌄
A rate-and-term refi changes your interest rate, loan term, or both without taking cash out. This is the most common type of refinance, used to lower monthly payments or pay off the loan faster.