Mortgage Refinance Calculator

Refinancing generally makes sense when the benefits outweigh the upfront costs, and you plan to remain in the home long enough to recoup those costs (the break-even point). As a rule of thumb, refinancing is worth exploring when you can reduce your interest rate by at least 0.5%–1.0% or more. However, the rate reduction alone is not sufficient — you must also factor in closing costs, how many years remain on your current loan, your new loan term, and how long you plan to stay in the home. Other situations where refinancing may be beneficial include: switching from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage for payment certainty; shortening your loan term to pay off faster and build equity; removing PMI if your home value has risen enough; or tapping home equity via a cash-out refinance for home improvements or debt consolidation.

Refinance closing costs typically range from 2% to 5% of the loan balance. For a $300,000 loan, expect $6,000–$15,000 in closing costs. The major components include: origination fee (0.5%–1.5% of loan amount); appraisal fee ($300–$700); title search and title insurance ($400–$900); recording fees ($50–$250); credit report fee ($30–$50); and prepaid items such as homeowner's insurance, property taxes, and prepaid interest. Some lenders offer 'no-closing-cost' refinances, which roll the costs into the loan balance or charge a slightly higher interest rate to offset the fees. While this eliminates the upfront payment, you end up paying more over the life of the loan. Always compare the APR (Annual Percentage Rate), which includes fees, rather than just the interest rate when shopping for a refinance.

The break-even point is the number of months it takes for your cumulative monthly payment savings to equal your upfront closing costs. It is calculated by dividing total closing costs by the monthly payment reduction: Break-Even Months = Closing Costs ÷ Monthly Savings. For example, if refinancing saves you $150 per month and costs $5,400 in closing costs, your break-even point is 36 months (3 years). If you plan to sell the home or pay off the mortgage before reaching the break-even point, refinancing will cost you money overall. A break-even period under 24 months is generally considered excellent; 24–60 months is good; over 60 months suggests the savings may not justify the refinance unless you plan to stay long-term.

A rate-and-term refinance replaces your existing mortgage with a new one at a different interest rate, loan term, or both. The new loan amount equals your current remaining balance (plus closing costs if rolled in). The primary goal is to reduce your monthly payment, shorten your payoff timeline, or both. A cash-out refinance allows you to borrow more than you currently owe, receiving the difference in cash. For example, if you have $200,000 remaining on your mortgage but your home is worth $350,000, you could refinance for $250,000, pay off the existing loan, and receive $50,000 cash. Cash-out refinances typically carry slightly higher interest rates than rate-and-term refinances, and you must maintain enough equity to satisfy the lender's LTV (loan-to-value) requirements — usually 80% LTV is the maximum, though some programs allow up to 90%.

Yes, refinancing to a new 30-year loan does reset your amortization schedule, which has significant implications. Even at a lower rate, resetting to 30 years from, say, 22 remaining years means you will take 8 additional years to pay off the home — and interest is front-loaded in amortization, meaning early payments are mostly interest. The total interest paid over the new longer term can actually exceed what you would have paid on the existing loan, despite the lower rate. To avoid this, many borrowers refinance to a shorter term (15 or 20 years) to match or shorten their remaining payoff timeline. Alternatively, you can refinance to a 30-year loan for the lower payment but make extra principal payments to match the old payoff date. This calculator shows total interest for both scenarios so you can compare the true cost.

Applying for a refinance triggers a hard credit inquiry, which can temporarily reduce your credit score by 5–10 points. If you shop multiple lenders for a refinance within a short window (typically 14–45 days, depending on the scoring model), all the mortgage inquiries within that period are usually treated as a single inquiry, minimizing the credit score impact. Once the new mortgage is opened, your credit mix may improve slightly and on-time payments help your score over time. However, the old mortgage account will show as 'closed,' which can slightly affect your average account age — a factor in credit scores. Generally, the short-term credit score impact of a refinance is minor and temporary, especially if you maintain a strong overall credit profile.

Minimum credit score requirements vary by loan type and lender. For a conventional refinance, most lenders require a minimum credit score of 620–640, though scores of 740+ are needed for the best rates. For FHA refinances (available to existing FHA loan holders), the minimum is typically 580 for maximum financing. VA refinances (for veterans and active military) have no official minimum, but most lenders prefer 620+. Interest rate adjustments based on credit score (LLPAs — Loan-Level Price Adjustments) mean that borrowers with scores below 740 will typically be offered higher rates than quoted benchmark rates. Improving your credit score before applying for a refinance can have a significant impact on the rate you receive and the total cost of the loan.