Refinance Calculator
Calculate savings from mortgage refinancing and determine break-even points for closing costs.
Refinance Savings Calculator
Compare your current mortgage with a new refinanced loan
Break-Even Calculator
Calculate how long it takes to recover closing costs
When to Consider Refinancing
Key factors that make refinancing worthwhile
Good Reasons to Refinance
- • Interest rates dropped significantly (0.5-1% or more)
- • You want to switch from ARM to fixed rate
- • Remove private mortgage insurance (PMI)
- • Access home equity for improvements
- • Consolidate debt at lower rates
Consider Carefully
- • Break-even period exceeds 5 years
- • Planning to move within 2-3 years
- • Credit score has declined significantly
- • Home value has dropped substantially
- • High closing costs relative to savings
Typical Refinancing Costs
Understanding the costs involved in refinancing
| Cost Type | Typical Range | Description |
|---|---|---|
| Application Fee | $300 - $500 | Processing your loan application |
| Appraisal Fee | $300 - $600 | Professional home valuation |
| Origination Fee | 0.5% - 1.5% of loan | Lender's fee for processing loan |
| Title Insurance | $400 - $900 | Protects against title issues |
| Attorney/Closing | $500 - $1,500 | Legal services and closing costs |
| Total Range | 2% - 6% of loan | All costs combined |
How to Use the Refinance Calculator
Step 1: Gather Current Loan Information
Find your current loan balance, interest rate, and remaining term from your latest mortgage statement. Contact your lender if you need the exact payoff amount.
Step 2: Research New Loan Terms
Shop around for current interest rates and loan terms. Consider different lenders and loan programs to find the best rates and lowest closing costs.
Step 3: Estimate Closing Costs
Closing costs typically range from 2-6% of the loan amount. Get loan estimates from multiple lenders to compare total costs and choose the best option.
Refinancing Tips
- • The "1% rule" - refinance if you can reduce your rate by at least 1%
- • Consider your credit score - better credit gets better rates
- • Factor in how long you plan to stay in the home
- • Look for no-closing-cost loans if you don't plan to stay long
Frequently Asked Questions
How much can I save by refinancing?
Savings depend on the rate reduction, loan amount, and how long you keep the new loan. A 1% rate reduction on a $300,000 loan could save about $300 monthly and thousands in total interest over the loan term.
How long does the refinancing process take?
Typically 30-45 days from application to closing. The process includes application, appraisal, underwriting, and final approval. Some lenders offer expedited processing.
Can I refinance if my home value has decreased?
It may be challenging if you owe more than the home's current value. Look into government programs like HARP (if still available) or ask lenders about options for underwater mortgages.
Should I reset to a 30-year term?
Not necessarily. If you can afford it, consider a shorter term to save on total interest. You could also make extra payments to pay off a 30-year loan early while maintaining payment flexibility.