Refinance Calculator
Compare mortgage refinancing options and calculate potential savings. Analyze break-even points, monthly payment changes, and total costs to make informed refinancing decisions.
How to Use the Refinance Calculator
- Enter Current Loan Details: Input your current mortgage balance, interest rate, and remaining term
- Set New Loan Terms: Enter the new interest rate, loan term, and any points you're considering
- Add Closing Costs: Include refinancing fees, appraisal, title insurance, and other costs
- Consider Cash-Out: If taking cash out, enter the additional amount you want to borrow
- Review Analysis: Compare monthly payments, total interest, and break-even timeline
- Make Decision: Determine if refinancing makes financial sense for your situation
Refinancing Examples
Rate & Term Refinance
Cash-Out Refinance
Refinancing Guidelines:
- Rate Reduction: Generally need at least 0.5-1% rate reduction to justify costs
- Break-Even Period: Ensure you'll stay in the home longer than break-even timeline
- Credit Score: Higher credit scores qualify for better refinancing rates
- Home Equity: Need sufficient equity to avoid PMI on new loan
Understanding Refinancing
Types of Refinancing
Rate & Term Refinance
Change interest rate or loan term without taking cash out
Cash-Out Refinance
Borrow against home equity to receive cash for other purposes
Cash-In Refinance
Pay down principal to reach better loan-to-value ratio
Key Considerations
Closing Costs (2-5%)
Appraisal, title insurance, loan origination, and other fees
Break-Even Point
Time needed to recoup closing costs through monthly savings
Total Interest
Compare total interest paid over life of both loans
Frequently Asked Questions
When should I consider refinancing?
Consider refinancing when rates drop by 0.5-1%, you want to change loan terms, need cash for home improvements, or want to remove PMI.
How much does refinancing cost?
Refinancing typically costs 2-5% of the loan amount, including appraisal, title insurance, loan origination fees, and other closing costs.
What is a break-even point?
The break-even point is when your monthly savings equal your closing costs. You should plan to stay in your home longer than this period.
Can I refinance with bad credit?
Yes, but you may not qualify for the best rates. Work on improving your credit score first, or consider FHA streamline refinancing if you have an FHA loan.
Should I pay points to lower my rate?
Points make sense if you'll stay in the home long enough to recoup the cost through lower monthly payments. Each point typically costs 1% of the loan amount.
What documents do I need to refinance?
You'll need income verification, tax returns, bank statements, insurance information, and your current mortgage statement. The process is similar to your original mortgage application.