Mortgage Refinance Calculator
Determine if refinancing your mortgage will save you money with our free calculator. Refinancing replaces your existing loan with a new one, potentially lowering your rate, reducing your payment, or changing your loan term to better fit your financial goals.
Types of Refinance Options
| Refinance Type | Purpose | Typical Savings Trigger |
|---|---|---|
| Rate-and-Term | Lower rate or change term | Rate drop of 0.5-1%+ |
| Cash-Out | Access equity as cash | Need funds, have 20%+ equity |
| Cash-In | Lower LTV, eliminate PMI | Have cash to reduce balance |
| Streamline (FHA/VA) | Simplify existing gov loan | Any rate improvement |
| HARP Replacement | High LTV conventional | Underwater or low equity |
Refinance Break-Even Analysis
``javascript
function calculateRefinanceBreakEven(currentPayment, newPayment, closingCosts) {
const monthlySavings = currentPayment - newPayment;
if (monthlySavings <= 0) {
return { worthIt: false, message: 'New payment is not lower' };
}
const breakEvenMonths = Math.ceil(closingCosts / monthlySavings);
const breakEvenYears = (breakEvenMonths / 12).toFixed(1);
return {
worthIt: true,
monthlySavings: monthlySavings.toFixed(2),
breakEvenMonths,
breakEvenYears: breakEvenYears + ' years',
fiveYearSavings: ((monthlySavings * 60) - closingCosts).toFixed(2)
};
}
function compareRefinanceScenarios(loanBalance, currentRate, newRate, termYears) {
const monthlyRate = (rate) => rate / 100 / 12;
const numPayments = termYears * 12;
const calcPayment = (balance, rate) => {
const r = monthlyRate(rate);
return balance * (r * Math.pow(1 + r, numPayments)) / (Math.pow(1 + r, numPayments) - 1);
};
return {
currentPayment: calcPayment(loanBalance, currentRate).toFixed(2),
newPayment: calcPayment(loanBalance, newRate).toFixed(2),
monthlySavings: (calcPayment(loanBalance, currentRate) - calcPayment(loanBalance, newRate)).toFixed(2)
};
}
``
When Refinancing Makes Sense
The traditional rule suggests refinancing when rates drop 1% or more, but today's market often makes sense at 0.5% with low closing costs. Consider how long you plan to stay in the home—if you will move before reaching break-even, refinancing may not pay off. Also weigh whether you want to extend your term (lower payments but more interest) or shorten it (higher payments but faster payoff).
Where the Money Goes
On $350,000 at 6.5% over 30 years, paying $2,212 a month:
| Point | Principal repaid | Interest paid | Balance |
|---|---|---|---|
| Year 3 | $12,540 | $67,101 | $337,460 |
| Year 8 | $36,572 | $162,529 | $313,428 |
| Year 15 | $96,043 | $302,160 | $253,957 |
| Year 23 | $192,748 | $404,556 | $157,252 |
| Year 30 | $350,000 | $446,406 | $0 |
What a Rate Change Costs
| Rate | Monthly | vs 6.5% | Total repaid |
|---|---|---|---|
| 5.50% | $1,987 | -$225 | $715,414 |
| 6.00% | $2,098 | -$114 | $755,434 |
| 6.50% | $2,212 | — | $796,406 |
| 7.00% | $2,329 | +$116 | $838,281 |
| 7.50% | $2,447 | +$235 | $881,010 |