Refinance Calculator

The break-even point is the number of months it takes for your monthly savings from a lower payment to fully offset the closing costs you paid to refinance. For example, if your closing costs are $6,000 and you save $250/month on your new payment, your break-even is 24 months. If you plan to stay in the home longer than that, refinancing is almost certainly worth it. If you might move or sell before then, you could lose money on the transaction. This calculator computes your break-even automatically — it’s the single most important number when evaluating any refinance.

Refinancing typically makes financial sense when: (1) Current rates are at least 0.5%–1% lower than your existing rate and you plan to stay in the home past your break-even point. (2) You want to eliminate FHA MIP by refinancing into a conventional loan once you have 20% equity. (3) You want to access equity via cash-out for high-priority expenses. (4) You want to shorten your loan term to pay off your home faster. (5) You have a VA or FHA loan and qualify for a streamline refinance (IRRRL or FHA Streamline), which requires minimal documentation. Use this calculator to model your specific numbers — the math is more reliable than general rules of thumb.

A rate-and-term refinance replaces your existing mortgage with a new one at a different interest rate, a different loan term, or both — without changing the loan amount beyond the original balance and closing costs. The goal is usually to lower your monthly payment or pay off the loan faster. A cash-out refinance replaces your mortgage with a larger loan, and the difference between the new loan and your current balance is paid to you as cash at closing. For example, if you owe $200,000 on a home worth $350,000 and take a $250,000 cash-out refi, you receive $50,000 in cash. Cash-out refinancing increases your debt and resets your amortization clock, but can be cost-effective when funds are used for value-adding purposes.

Conventional refinances have no government-mandated upfront fees, though you’ll still have lender fees and closing costs (typically 2–3% of the loan). FHA refinances require an upfront Mortgage Insurance Premium (UFMIP) of 1.75% of the base loan amount, typically financed into the new loan, plus annual MIP. VA refinances carry a funding fee: for an IRRRL (streamline refi), the fee is just 0.5% of the loan. For VA cash-out refinances, the fee is 2.15% (first use) or 3.3% (subsequent use) — veterans with service-connected disabilities are exempt. The major VA advantage: no monthly mortgage insurance, ever. This calculator handles all three loan types including their financed fees automatically.

Refinance closing costs typically run 2%–3% of your loan amount for a straightforward rate-and-term refinance. On a $300,000 loan, that’s $6,000–$9,000. Common line items include loan origination fee (0.5%–1%), appraisal ($400–$700), title search and title insurance ($500–$1,500), attorney or settlement fees ($500–$1,000), prepaid interest, and escrow replenishment. Some lenders offer “no-closing-cost” refinances by rolling costs into the loan balance or accepting a slightly higher rate. Rolling costs in makes your break-even harder to reach, since your new loan is larger and monthly savings are smaller — this calculator models both scenarios via the “Roll closing costs into loan?” toggle.

Refinancing from a 30-year to a 15-year mortgage typically saves a substantial amount of total interest — often 50% or more of the remaining interest on the original loan — and 15-year rates are usually 0.5%–0.75% lower than 30-year rates. However, your monthly payment will increase significantly (often 30–50%), which requires stable income and a disciplined budget. A middle-ground alternative is to keep the 30-year loan but make extra principal payments each month — this achieves similar payoff acceleration with the flexibility to revert to the base payment in a tight month. Use this calculator to compare all three scenarios: current loan, 15-year refi, and 30-year refi with extra payments. The amortization schedule and “interest saved” figures will make the right choice clear.