Finance
Refinance Calculator
Should you refinance? Compare your current loan to a new one and see if the savings are worth the closing costs.
Current Loan
New Loan
Monthly Savings
$417
Current: $2,120 → New: $1,703
Break-Even Period
12 months
$5,000 in closing costs
Lifetime Savings
$120,091
Over remaining 25 years
You will break even in 12 months. If you plan to stay in the home longer than that, refinancing makes financial sense.
Frequently asked questions
When does refinancing make sense?
Generally, refinancing makes sense if you can lower your rate by at least 1% and plan to stay in the home long enough to recoup closing costs through monthly savings. Also consider refinancing to switch from an ARM to a fixed rate or to shorten your loan term.
What are typical closing costs?
Closing costs for a refinance typically range from 2-5% of the loan amount. They include the appraisal fee, origination fee, title insurance, recording fees, and other third-party charges. Some lenders offer no-closing-cost refinances but with a higher rate.
What is the difference between rate-and-term and cash-out refi?
Rate-and-term refinancing simply changes your interest rate and/or loan term. Cash-out refinancing increases your loan balance and you receive the difference in cash, which can be used for home improvements, debt consolidation, or other expenses.
Can I refinance if rates are higher?
If current rates are higher than your existing rate, refinancing does not make sense for lowering payments. However, you might still refinance to switch from an ARM to a fixed rate for stability, or to consolidate high-interest debt.
Calculate whether refinancing your mortgage makes financial sense. Enter your current loan details and the proposed new loan terms to see your monthly savings, break-even period, and lifetime savings after closing costs.
Refinancing can save you thousands of dollars over the life of your loan, but closing costs mean it is not always the right choice. Use this calculator to find the numbers that work for your situation.