Mortgage Refinance Calculator
Compare your current mortgage with refinancing options to see potential savings and determine if refinancing makes sense for you.
Refinance Analysis Results
Monthly Savings
$0
Total Savings
$0
Break-even Time
0 months
New Monthly Payment
$0
Understanding Mortgage Refinancing
Refinancing your mortgage can be a smart financial move that could save you thousands of dollars over the life of your loan. However, it's important to understand the process, costs, and potential benefits before making a decision.
Key Factors to Consider
- Interest Rate Differential: Generally, you should consider refinancing if you can reduce your interest rate by at least 0.5 to 1 percentage point.
- Break-even Period: Calculate how long it will take to recover the costs of refinancing through monthly savings.
- Length of Stay: Plan to stay in your home long enough to benefit from the refinance savings.
- Closing Costs: Factor in all expenses, including application fees, appraisal costs, and points.
Types of Mortgage Refinancing
Rate and Term Refinance
Changes your interest rate, loan term, or both while keeping the loan balance the same.
- Lower monthly payments
- Shorter loan term
- Fixed vs. adjustable rate
Cash-Out Refinance
Borrow more than you owe on your current mortgage and receive the difference in cash.
- Home improvements
- Debt consolidation
- Major expenses
Pros and Cons of Refinancing
Benefits
- Lower monthly payments
- Reduced interest rate
- Shortened loan term
- Access to home equity
- Debt consolidation options
Drawbacks
- Closing costs and fees
- Extended loan term
- Possible higher total interest
- Risk of underwater mortgage
- Impact on credit score
Pro Tip: Monitor mortgage rates regularly and keep an eye on your home's value. The best time to refinance is when rates are significantly lower than your current rate and your home has appreciated in value.
Refinancing Costs
Common expenses associated with refinancing include:
- Application Fee: $250-$500
- Appraisal: $300-$700
- Title Search and Insurance: $500-$1,000
- Points: 0-3% of loan amount
- Attorney/Closing Fees: $500-$1,000
When to Consider Refinancing
You might want to refinance your mortgage if:
- Interest rates have dropped significantly below your current rate
- Your credit score has improved substantially since your original mortgage
- You want to switch from an adjustable-rate to a fixed-rate mortgage
- You need to access home equity for major expenses
- You can afford higher monthly payments to shorten your loan term
How to Prepare for Refinancing
- Check your credit score and report
- Gather recent pay stubs and tax returns
- Calculate your home's current value
- Compare rates from multiple lenders
- Review your current mortgage terms
- Prepare for the home appraisal
Important Note: This calculator provides estimates based on the information you enter. Actual refinancing terms and savings may vary based on your specific situation, credit score, and lender requirements. Always consult with multiple lenders and a financial advisor before making a decision.