Refinance Calculator
Enter your current mortgage and new loan terms to calculate monthly savings, break-even point, and total lifetime savings from refinancing.
Monthly Savings by Rate Reduction ($300K Loan, 25 Years Remaining)
| Current Rate | New Rate | Monthly Savings | Break-Even (est.) |
|---|---|---|---|
| 7.5% | 6.5% | ~$196/mo | ~26 months |
| 7.5% | 6.0% | ~$295/mo | ~17 months |
| 7.0% | 6.0% | ~$192/mo | ~26 months |
| 6.5% | 5.5% | ~$188/mo | ~27 months |
| 6.0% | 5.0% | ~$183/mo | ~27 months |
Break-even assumes $5,000 closing costs. Same loan term (30-year restart) for all scenarios. Use the calculator above for your exact numbers.
Frequently Asked Questions
When does refinancing make financial sense?
Refinancing generally makes sense when: (1) You can lower your rate by at least 0.5–1%. (2) You plan to stay in the home long enough to recoup closing costs (break-even analysis). (3) You have good credit (720+) to qualify for the best rates. (4) Your home has sufficient equity (typically 20%+ for the best rates; 5–10% minimum). The break-even point is the key metric: divide total closing costs by monthly savings. If you plan to stay 36 months and break-even is 24 months, refinancing makes sense. If you're moving in 18 months, it doesn't.
What are typical refinance closing costs?
Refinance closing costs typically run 2–5% of the loan balance, or roughly $4,000–$10,000 on a $200,000 loan. Key costs: loan origination fee (0.5–1% of loan), appraisal ($400–$700), title search and insurance ($700–$1,500), attorney fees (varies by state), recording fees ($25–$250), credit report ($30–$50), and prepaid interest (interest accrued from closing date to end of month). Some lenders offer 'no-closing-cost' refinances by rolling fees into the rate or loan balance — this increases your rate by about 0.25–0.5%.
Should I refinance to a 15-year or 30-year loan?
15-year refinance: Higher monthly payments but significantly lower total interest. Rates are typically 0.5–0.75% lower than 30-year. If you can afford the payment, you build equity faster and save hundreds of thousands in interest over the life of the loan. Best if you are later in your career with a stable income. 30-year refinance: Lower monthly payment provides more cash flow flexibility. Better if you need to reduce monthly payment (e.g., after income reduction or job change). Total interest paid is much higher. Some people prefer the 30-year and invest the payment difference.
What credit score do I need to refinance?
Minimum credit scores for refinancing: Conventional loan: 620 minimum (best rates at 740+). FHA refinance: 580 minimum. VA refinance (IRRRL): no minimum FICO in many cases. Jumbo loans: typically 700+. Your credit score significantly affects your rate. The difference between a 680 and 760 score on a $400,000 30-year loan can be 0.5–1.0% in rate — that's $100–$200/month or $36,000–$72,000 over the loan life. Check your credit report for errors and pay down revolving debt below 30% utilization before applying.
What is a cash-out refinance?
A cash-out refinance replaces your current mortgage with a larger loan, and you receive the difference in cash. Example: $200,000 remaining balance on a $350,000 home. You refinance for $270,000 and receive $70,000 cash (minus closing costs). The cash can be used for home improvements, debt consolidation, or other purposes. Cash-out refinances typically have slightly higher rates than rate-and-term refinances. Most lenders allow you to cash out up to 80% of your home's value (leaving 20% equity). The cash is not taxable income, and interest is deductible if used for home improvements.