Mortgage Refinance Calculator

Calculate potential savings, breakeven points, and determine if refinancing your mortgage makes financial sense. Compare current vs. new loan terms.

Current Loan Details

Current Loan Balance $300,000
$
Current Interest Rate 6.5%
%
Remaining Loan Term 25 Years
Years
Current Monthly Payment $2,024
$

New Loan Details

New Loan Type Fixed Rate
🔒
Fixed Rate
Stable payments
📈
Adjustable
Lower initial
🏦
FHA Refi
Streamline
⭐
VA Refi
IRRRL
💰
Cash-Out
Tap equity
💳
HELOC
Line of credit
⏱️
Term Change
15 vs 30 yr
✏️
Custom
Your own
New Interest Rate 5.5%
%
New Loan Term 30 Years
30 Years
20 Years
15 Years
10 Years
Refinance Closing Costs $6,000 (2%)
Lender Fees
$2,000
Appraisal & Title
$1,500
Escrow & Prepaids
$2,500
Roll Costs into Loan
Current Home Value $400,000
$

Refinance Analysis

Monthly Savings
$304
new vs current
New Payment
$1,720
principal + interest
Breakeven Point
20 Months
to recover costs
Total Savings
$54,720
over loan term
TOTAL INTEREST SAVINGS
$91,200
interest saved over life of loan
Current vs. New Loan Comparison
Side-by-side analysis
Current Loan
$2,024
Monthly payment
New Loan
$1,720
Monthly payment
Monthly Savings
$304
Reduction per month
Breakeven
20 Months
To recover costs
Loan Amortization Comparison
Current Loan
$307,200
total interest
New Loan
$216,000
total interest
Net Savings
$91,200
interest saved
Monthly Payment Comparison $304 Savings
Current: $2,024
New: $1,720

Refinance Calculator: Analyze Mortgage Refinancing Savings and Breakeven Points

Our comprehensive refinance calculator helps homeowners analyze potential savings, calculate breakeven points, and determine whether refinancing their mortgage makes financial sense. Whether you’re considering a rate-and-term refinance to lower your interest rate, a cash-out refinance to access home equity, or a loan term change to accelerate payoff, this sophisticated tool provides accurate calculations based on current market conditions and your specific loan details. Use this mortgage refinance calculator to compare current vs. new loan terms, evaluate closing costs, and make data-driven decisions about when and how to refinance your home loan for maximum financial benefit.

Using a refinance calculator is essential for determining if refinancing makes financial sense for your specific situation. By entering your current loan details, proposed new loan terms, and closing costs, you can instantly calculate monthly payment savings, total interest savings, breakeven period, and overall financial impact. This calculator helps you avoid common refinancing mistakes, such as extending your loan term unnecessarily or paying high closing costs that outweigh potential savings.

How the Refinance Calculator Works

This sophisticated calculator uses industry-standard mortgage formulas and current market data to provide accurate refinance analysis. It allows you to:

  • Calculate monthly payment savings between current and new loans
  • Determine breakeven point (how long to recover closing costs)
  • Compute total interest savings over the life of the loan
  • Analyze cash-out refinance scenarios and equity requirements
  • Compare different loan terms (15-year vs. 30-year refinance)
  • Evaluate whether to roll closing costs into the new loan
  • Calculate loan-to-value (LTV) ratios for qualification

When Does Refinancing Make Financial Sense?

Refinancing typically makes sense when you can achieve one or more of these goals:

  • Interest Rate Reduction: Lower rate by 0.5-1% or more (Rule of thumb: 1% reduction on $300,000 saves ~$180/month)
  • Loan Term Shortening: Switch from 30-year to 15-year mortgage (higher payments but faster equity build)
  • Cash-Out for Debt Consolidation: Use home equity to pay off higher-interest debt (credit cards, personal loans)
  • Removing Mortgage Insurance: Refinance when equity reaches 20% to eliminate PMI/MIP
  • Switching Loan Types: Convert from ARM to fixed-rate for payment stability
  • Home Improvement Funding: Access equity for renovations that increase property value

Key Refinance Metrics Explained

Understanding these metrics is crucial for smart refinancing decisions:

  • Monthly Payment Savings: Difference between current and new monthly payments
  • Breakeven Point: Months needed for monthly savings to equal closing costs (Formula: Closing costs ÷ Monthly savings)
  • Total Interest Savings: Difference in total interest paid over loan life
  • Loan-to-Value (LTV) Ratio: Loan amount ÷ Home value (Most lenders require ≤80% for best rates)
  • Debt-to-Income (DTI) Ratio: Total monthly debt payments ÷ Gross monthly income (Typically must be ≤43%)
  • Annual Percentage Rate (APR): True cost of borrowing including fees and interest

Refinance Closing Costs Breakdown

Typical refinance closing costs range from 2-5% of loan amount:

  • Lender Fees: Origination, underwriting, processing ($1,500-$3,000)
  • Third-Party Fees: Appraisal, credit report, flood certificate ($500-$1,500)
  • Title & Escrow: Title search, insurance, settlement ($1,000-$2,000)
  • Prepaid Items: Interest, insurance, property taxes ($1,000-$3,000)
  • Government Fees: Recording, transfer taxes ($100-$500)
  • Discount Points: Optional fees to buy down interest rate (1 point = 1% of loan amount)

Special Refinance Programs

Several specialized refinance programs offer unique benefits:

  • FHA Streamline Refinance: Reduced documentation, no appraisal required for existing FHA loans
  • VA Interest Rate Reduction Refinance Loan (IRRRL): Simplified process for VA loan holders
  • HARP Replacement (HIRO): For borrowers with little or no equity
  • No-Closing-Cost Refinance: Lender pays closing costs in exchange for higher rate
  • Cash-Out Refinance: Access home equity (typically up to 80% LTV)
  • Home Equity Line of Credit (HELOC): Revolving credit line using home as collateral

Frequently Asked Questions About Mortgage Refinancing

1. How much should interest rates drop to make refinancing worthwhile?

The general rule is a 0.5-1% rate reduction, but the real answer depends on your loan balance and closing costs. Calculate your breakeven point: Closing costs ÷ Monthly savings. If you’ll stay in the home longer than the breakeven period, refinancing likely makes sense. Example: $5,000 closing costs ÷ $200 monthly savings = 25 month breakeven. If moving within 2 years, not worth it. For larger loans, smaller rate drops may work: 0.5% on $500,000 saves ~$150/month.

2. Should I refinance to a 15-year or stick with 30-year mortgage?

15-year refinance advantages: Lower interest rate (typically 0.25-0.5% less), build equity faster, pay off mortgage sooner, save substantial interest. Disadvantages: Higher monthly payments (25-50% more). 30-year advantages: Lower payments, more cash flow flexibility. Example: $300,000 at 6.5%: 30-year = $1,896/month, total interest $382,000. 15-year at 6.0% = $2,531/month, total interest $155,000. Choose based on budget and goals.

3. What is a good breakeven point for refinancing?

A good breakeven point is typically 24-36 months or less. Shorter is better: Less than 24 months = Excellent, 24-48 months = Good, Over 48 months = Questionable unless staying long-term. Consider your plans: If moving within 3 years, breakeven should be under 24 months. If staying 10+ years, 48-month breakeven may be acceptable. Also consider total savings: Longer breakeven with huge long-term savings (switching from 30 to 15-year) may be worth it.

4. How do I calculate if I should pay points to lower my rate?

Calculate: Points cost ÷ Monthly savings from lower rate = Breakeven in months. Example: 1 point on $300,000 loan = $3,000. Rate drops from 6.5% to 6.0%, saving $100/month. $3,000 ÷ $100 = 30 month breakeven. If staying longer than 30 months, paying points makes sense. General rule: Pay points if staying beyond breakeven, otherwise take higher rate. Also consider tax implications (points may be deductible).

5. Can I refinance with bad credit or low equity?

Options exist but are limited: For low equity (below 20%): FHA streamline (if current FHA), VA IRRRL (if VA loan), conventional with PMI. For bad credit (below 620): FHA (min 580), subprime lenders (higher rates), credit repair first. Minimum requirements typically: 620 credit score (conventional), 580 (FHA), 580-640 (VA), 20% equity for best rates, 43% DTI max. Improving credit 20-40 points can save 0.25-0.5% on rate.

6. Should I roll closing costs into my refinance loan?

Rolling costs into loan: Pros: No out-of-pocket cash, easier to qualify. Cons: Higher loan balance, more interest paid over time, may affect LTV. Paying costs upfront: Pros: Lower loan balance, less interest, better LTV. Cons: Requires cash. Good approach: Roll costs if breakeven still acceptable and cash is tight. Pay upfront if you have savings and want maximum savings. Example: $5,000 rolled into $300,000 loan at 6% adds ~$30/month payment.

7. How does refinancing affect my taxes?

Refinancing can affect: Mortgage interest deduction (deductible on loans up to $750,000), Points deduction (amortize over loan life or deduct in year of refinance if for primary home), Property tax deduction (unchanged), Capital gains exclusion (unaffected). Important: Cash-out for home improvements may make interest deductible, but for other uses may not be. Refinancing resets amortization: More interest, less principal in early years = potentially higher deduction initially. Always consult a tax professional.

8. What’s better: Refinance or home equity loan/HELOC?

Refinance advantages: Lower rates (first lien position), fixed payments, single payment. HELOC advantages: Lower closing costs ($0-$500), flexible draw period, interest-only payments initially, keep original low rate. Cash-out refinance rates: 6-7% typically. HELOC rates: Prime + 0-2% (7-9% currently). Rule: Refinance if accessing >75% of equity or want fixed rate. HELOC if smaller amount, temporary need, or want flexibility. Second lien (HELOC) has higher risk if default.

9. How long does the refinance process take?

Typical timeline: 30-45 days from application to closing. Breakdown: Application & disclosure (1-3 days), Processing & underwriting (15-25 days), Appraisal (5-10 days), Conditional approval (3-5 days), Clear to close (3-5 days), Closing (1 day). Faster options: Streamline refinances (FHA, VA): 15-30 days. Delays occur from: Appraisal issues, title problems, income/employment verification, high volume periods. Lock rate for 45-60 days. Some lenders offer 15-day closings for simple refinances.

10. Will refinancing hurt my credit score?

Refinancing typically causes a temporary 5-15 point credit score drop from: Hard credit inquiry (5-10 points), New account opening (5-10 points), Closing old account (may affect credit mix). However, long-term benefits: Lower credit utilization if paying off debts, positive payment history continues. Tips: Complete applications within 14-45 day shopping window (multiple inquiries count as one), avoid other credit applications during process, continue making current mortgage payments on time. Score typically recovers within 3-6 months.

`); printWindow.document.close(); printWindow.focus(); printWindow.print(); // Visual feedback printBtn.innerHTML = ' Printed!'; setTimeout(() => { printBtn.innerHTML = ' Print Analysis'; }, 1000); } // Update display values function updateDisplayValues() { newLoanTypeValue.textContent = loanData[newLoanType].name; currentBalanceValue.textContent = formatCurrency(currentBalance); currentRateValue.textContent = currentRate.toFixed(1) + '%'; remainingTermValue.textContent = remainingTerm + ' Years'; currentPaymentValue.textContent = formatCurrency(currentPayment); newRateValue.textContent = newRate.toFixed(1) + '%'; newTermValue.textContent = newTerm + ' Years'; const totalClosingCosts = lenderFees + appraisalFees + escrowFees; closingCostsValue.textContent = `${formatCurrency(totalClosingCosts)} (${((totalClosingCosts / currentBalance) * 100).toFixed(1)}%)`; lenderFeesValue.textContent = formatCurrency(lenderFees); appraisalValue.textContent = formatCurrency(appraisalFees); escrowValue.textContent = formatCurrency(escrowFees); cashoutValue.textContent = formatCurrency(cashoutAmount); homeValueValue.textContent = formatCurrency(homeValue); } // Event Listeners for loan buttons loanBtns.forEach(btn => { btn.addEventListener('click', function() { loanBtns.forEach(b => b.classList.remove('active')); this.classList.add('active'); newLoanType = this.getAttribute('data-loan'); const defaultRate = parseFloat(this.getAttribute('data-rate')); // Update new rate to default for this loan type newRate = defaultRate; newRateSlider.value = newRate; newRateInput.value = newRate; // Show/hide cashout section if (newLoanType === 'cashout') { cashoutSection.style.display = 'block'; } else { cashoutSection.style.display = 'none'; cashoutAmount = 0; cashoutSlider.value = 0; cashoutInput.value = 0; } updateDisplayValues(); calculateRefinance(); }); }); // Event Listeners for term buttons termBtns.forEach(btn => { btn.addEventListener('click', function() { termBtns.forEach(b => b.classList.remove('active')); this.classList.add('active'); newTerm = parseInt(this.getAttribute('data-term')); newTermValue.textContent = newTerm + ' Years'; calculateRefinance(); }); }); // Event Listeners for sliders currentBalanceSlider.addEventListener('input', function() { currentBalance = parseInt(this.value); currentBalanceInput.value = currentBalance; updateDisplayValues(); calculateRefinance(); }); currentRateSlider.addEventListener('input', function() { currentRate = parseFloat(this.value); currentRateInput.value = currentRate; updateDisplayValues(); calculateRefinance(); }); remainingTermSlider.addEventListener('input', function() { remainingTerm = parseInt(this.value); remainingTermInput.value = remainingTerm; updateDisplayValues(); calculateRefinance(); }); currentPaymentSlider.addEventListener('input', function() { currentPayment = parseInt(this.value); currentPaymentInput.value = currentPayment; updateDisplayValues(); calculateRefinance(); }); newRateSlider.addEventListener('input', function() { newRate = parseFloat(this.value); newRateInput.value = newRate; updateDisplayValues(); calculateRefinance(); }); lenderFeesSlider.addEventListener('input', function() { lenderFees = parseInt(this.value); lenderFeesValue.textContent = formatCurrency(lenderFees); updateDisplayValues(); calculateRefinance(); }); appraisalSlider.addEventListener('input', function() { appraisalFees = parseInt(this.value); appraisalValue.textContent = formatCurrency(appraisalFees); updateDisplayValues(); calculateRefinance(); }); escrowSlider.addEventListener('input', function() { escrowFees = parseInt(this.value); escrowValue.textContent = formatCurrency(escrowFees); updateDisplayValues(); calculateRefinance(); }); cashoutSlider.addEventListener('input', function() { cashoutAmount = parseInt(this.value); cashoutInput.value = cashoutAmount; cashoutValue.textContent = formatCurrency(cashoutAmount); calculateRefinance(); }); homeValueSlider.addEventListener('input', function() { homeValue = parseInt(this.value); homeValueInput.value = homeValue; homeValueValue.textContent = formatCurrency(homeValue); calculateRefinance(); }); // Event Listeners for inputs currentBalanceInput.addEventListener('input', function() { let value = parseInt(this.value.replace(/[^0-9]/g, '')) || 0; if (value < 50000) value = 50000; if (value > 2000000) value = 2000000; currentBalance = value; currentBalanceSlider.value = value; this.value = value; updateDisplayValues(); calculateRefinance(); }); currentRateInput.addEventListener('input', function() { let value = parseFloat(this.value) || 6.5; if (value < 2) value = 2; if (value > 12) value = 12; currentRate = value; currentRateSlider.value = value; this.value = value.toFixed(1); updateDisplayValues(); calculateRefinance(); }); remainingTermInput.addEventListener('input', function() { let value = parseInt(this.value) || 25; if (value < 1) value = 1; if (value > 30) value = 30; remainingTerm = value; remainingTermSlider.value = value; this.value = value; updateDisplayValues(); calculateRefinance(); }); currentPaymentInput.addEventListener('input', function() { let value = parseInt(this.value.replace(/[^0-9]/g, '')) || 0; if (value < 500) value = 500; if (value > 10000) value = 10000; currentPayment = value; currentPaymentSlider.value = value; this.value = value; updateDisplayValues(); calculateRefinance(); }); newRateInput.addEventListener('input', function() { let value = parseFloat(this.value) || 5.5; if (value < 2) value = 2; if (value > 12) value = 12; newRate = value; newRateSlider.value = value; this.value = value.toFixed(1); updateDisplayValues(); calculateRefinance(); }); cashoutInput.addEventListener('input', function() { let value = parseInt(this.value.replace(/[^0-9]/g, '')) || 0; if (value < 0) value = 0; if (value > 200000) value = 200000; cashoutAmount = value; cashoutSlider.value = value; this.value = value; cashoutValue.textContent = formatCurrency(cashoutAmount); calculateRefinance(); }); homeValueInput.addEventListener('input', function() { let value = parseInt(this.value.replace(/[^0-9]/g, '')) || 0; if (value < 100000) value = 100000; if (value > 2000000) value = 2000000; homeValue = value; homeValueSlider.value = value; this.value = value; homeValueValue.textContent = formatCurrency(homeValue); calculateRefinance(); }); // Event Listeners for toggles rollCostsToggle.addEventListener('change', function() { rollCosts = this.checked; calculateRefinance(); }); // Event Listeners for buttons calculateBtn.addEventListener('click', calculateRefinance); resetBtn.addEventListener('click', resetCalculator); printBtn.addEventListener('click', printAnalysis); // Initialize updateDisplayValues(); calculateRefinance(); }

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