Mortgage Refinance Calculator
Calculate your savings and find out if refinancing makes sense
Last updated: January 2026
Current Loan
New Loan
Typically 2-5% of loan amount
Optional: Take equity as cash
Other Expenses
Refinancing Not Recommended
Monthly payment will increase or lifetime costs will be higher.
Payment Comparison
Cumulative Savings Over Time
Current vs Refinance Comparison
Detailed Analysis
When to Refinance
Good reasons: Lower interest rate (0.5%+ reduction), shorten loan term, eliminate PMI, cash-out for home improvements. Break-even rule: Plan to stay in home longer than break-even period. Typical costs: 2-5% of loan amount. Consider no-closing-cost options if you won't stay long.
Understanding Mortgage Refinancing
Break-Even Point Analysis
The break-even point is the most critical metric when evaluating a refinance. It represents the number of months required for your cumulative monthly savings to offset the upfront closing costs. For example, if your closing costs total $6,000 and you save $250 per month, your break-even point is 24 months. Financial advisors generally recommend refinancing only if you plan to stay in the home well beyond the break-even period, ideally at least two to three years past it.
Rate-and-Term vs Cash-Out Refinancing
A rate-and-term refinance replaces your existing mortgage with a new one at a lower interest rate or different term length, without increasing the loan balance. A cash-out refinance allows you to borrow more than your current balance and receive the difference as cash, which can be used for home improvements, debt consolidation, or other expenses. Cash-out refinances typically carry slightly higher interest rates (0.125-0.5% more) because they represent greater risk to the lender. Most lenders cap cash-out refinances at 80% loan-to-value ratio.
Closing Costs and Fees
Refinance closing costs typically range from 2% to 5% of the new loan amount and include appraisal fees ($300-$600), title search and insurance ($700-$900), origination fees (0.5-1% of the loan), and recording fees. Some lenders offer no-closing-cost refinance options where the fees are either rolled into the loan balance or offset by a slightly higher interest rate. It is important to compare the total cost of each approach over the period you expect to hold the loan.
Credit Score Requirements
Your credit score plays a significant role in the refinance rate you qualify for. Conventional refinance loans generally require a minimum score of 620, while FHA streamline refinances may accept scores as low as 580. Borrowers with scores of 740 or above receive the best available rates. Even a small difference in your score can affect your rate by 0.25% or more, so it may be worth improving your credit before applying. Check your credit report for errors and pay down revolving balances to maximize your score.
Frequently Asked Questions
When should I refinance my mortgage?
Refinancing typically makes sense when you can lower your interest rate by at least 0.5-1%, plan to stay in your home long enough to recoup closing costs, or need to switch from an adjustable-rate to a fixed-rate mortgage.
What is the break-even point on a refinance?
The break-even point is the number of months it takes for your monthly savings to equal the closing costs of refinancing. For example, if closing costs are $4,000 and you save $200/month, your break-even point is 20 months.
What closing costs are involved in refinancing?
Typical refinance closing costs range from 2-5% of the loan amount and include appraisal fees, title insurance, origination fees, and recording fees. Some lenders offer no-closing-cost refinances with a slightly higher interest rate.
What credit score do I need to refinance?
Most conventional refinance lenders require a minimum credit score of 620, though you will get better rates with 740 or higher. FHA streamline refinances may accept scores as low as 580. Your credit score directly affects the interest rate you are offered — even a 20-point difference can change your rate by 0.25%.
Does refinancing hurt my credit score?
Refinancing causes a small, temporary dip in your credit score due to the hard inquiry and new account. Typically the impact is 5-10 points and recovers within a few months. The long-term benefit of lower payments usually outweighs this short-term effect. Rate shopping within a 14-45 day window counts as a single inquiry.