Free Mortgage Refinance Calculator
Refinancing replaces your current mortgage with a brand new loan, ideally at a lower rate or better terms. Enter your current loan and the new loan you are considering to see your monthly savings, how long it takes to break even on closing costs, and whether you save interest over the life of the loan.
This free refinance calculator compares your current mortgage to a new loan. For example, refinancing a $300,000 balance from 7.5 percent with 25 years left into a new 30-year loan at 6.25 percent cuts the payment by about $370 a month, and $6,000 in closing costs breaks even in about 16 months. But stretching the term restarts the clock, so always check the lifetime interest difference too.
Estimates only. Actual refinance offers depend on credit, appraisal, loan program, and lender fees. Closing costs and rates vary. Not financial advice; compare real loan estimates before deciding.
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How refinance math works
A refinance pays off your old mortgage and opens a new one with a new rate, new term, and new monthly payment. The monthly payment formula is: payment = balance x monthly rate / (1 - (1 + monthly rate) ^ -payments). A lower rate shrinks the payment, but a longer term also shrinks it by spreading the balance over more months, which is why the monthly savings number alone can mislead.
The breakeven point is the real decision number: closing costs divided by monthly savings. If a refinance saves $300 a month and costs $6,000 to close, you break even in 20 months. Sell or refinance again before month 20 and you lost money; stay past it and every month after is profit. Your honest answer to how long you will keep the loan matters more than the rate quote.
Lifetime interest tells the rest of the story. Refinancing from 25 years remaining into a fresh 30-year loan usually raises total interest paid even at a lower rate, because you add years of payments. Compare total interest on the remaining old loan against total interest plus closing costs on the new loan. Sometimes the right refinance is a lower rate with a shorter term, which cuts both the payment and the lifetime interest.
Refinance calculator questions
How much does it cost to refinance a mortgage?
Closing costs on a refinance typically run 2 to 5 percent of the loan amount. On a $300,000 loan that is $6,000 to $15,000, covering the lender origination fee, appraisal, title search and insurance, recording fees, and prepaid interest and escrow. Lender credits can offset costs in exchange for a slightly higher rate, which is the trade behind no-closing-cost refinances.
When should I refinance my mortgage?
Refinance when the monthly savings repay the closing costs well before you plan to sell or refinance again. A rate drop of 0.75 to 1 percentage point is a common trigger on larger balances, because the savings accumulate fast. On smaller balances the same rate drop may never break even. Run the breakeven on your real numbers instead of following rules of thumb.
Does refinancing hurt your credit score?
A refinance creates a hard credit inquiry and a new account, and it closes the old mortgage account, which can trim a few points off your score temporarily. Multiple mortgage inquiries within a focused shopping window, usually 14 to 45 days depending on the scoring model, count as one. On-time payments on the new loan rebuild the score within months.
Can I refinance with bad credit?
Conventional refinances generally want a score of 620 or higher, with the best rates reserved for 740 plus. FHA streamline and VA interest rate reduction refinances are more forgiving because they skip some underwriting. Expect a higher rate with lower credit, which lengthens the breakeven, so improving your score first sometimes beats refinancing now.