What is a Refinance Calculator?
A refinance calculator is a mortgage tool that compares your current home loan to a potential new loan to determine if switching is financially beneficial. It identifies your monthly savings, total interest reduction, and the breakeven point—the time it takes for your savings to cover the closing costs of the new loan.
Refinancing can be a powerful way to lower your monthly expenses, but it's important to look beyond just the interest rate. This tool helps you account for the "hidden" costs of starting a new loan.
How to Perform a Refinance Analysis
Follow these steps to see if refinancing makes sense for your specific situation:
- 1Enter Current Loan DetailsInput your remaining principal balance, your current interest rate, and your monthly principal and interest payment.
- 2Input New Loan TermsEnter the new interest rate you've been quoted and the term length (e.g., 15, 20, or 30 years) you are considering.
- 3Account for Closing CostsEnter the estimated fees for the new loan. These typically range from 2% to 5% of the loan amount.
- 4Find the Breakeven PointReview the calculated months to breakeven. If you plan to sell the home before this date, refinancing may not be worth it.
Frequently Asked Questions
When is refinancing worth it?
Refinancing is generally worth it if you can lower your interest rate by at least 0.75% to 1% and plan to stay in the home long enough to reach the "breakeven point," where your cumulative monthly savings finally outweigh the upfront closing costs.
What are the common costs of refinancing?
Closing costs for a refinance typically range from 2% to 5% of the loan amount. These include application fees, appraisal fees, title search, and attorney fees. You can sometimes roll these costs into the new loan balance.
Does refinancing start my mortgage over?
A new 30-year refinance will reset your repayment timeline. However, you can choose a shorter term (like 15 or 20 years) to pay off your home faster, or continue making higher payments to match your original payoff date.
Refi Insights
Closing Costs
2% - 5% of Loan
Savings Goal
Drop Rate 0.75%+
2026 Strategy
Check FHA-to-Conv