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MORTGAGE REFINANCE CALCULATOR

Compare your current mortgage with a refinance estimate using your actual unpaid principal balance. See the payment change, estimated cash-flow break-even, selected-horizon borrowing cost, and lifetime cost difference.

Buying rather than refinancing? Use the Mortgage Payment Calculator. Testing extra payments on your existing loan? Use the Mortgage Payoff Calculator.

Scope: This calculator models a fixed-rate, rate-and-term refinance. It uses principal and interest, optional mortgage insurance, and the closing costs you enter. Property tax, homeowners insurance, escrow adjustments, cash-out proceeds, adjustable rates, points not included in closing costs, and prepayment penalties are excluded.
Loading the latest available Freddie Mac weekly mortgage averages from FRED...
Current Mortgage
New Refinance Loan

Refinance Analysis Results

Current Monthly P&I + Mortgage Insurance: $0.00
New Monthly P&I + Mortgage Insurance: $0.00
Monthly Cash-Flow Change: $0.00
Estimated Cash-Flow Break-Even: 0 Months
Current Loan Cost Over 5 Years: $0.00
New Loan Cost Over 5 Years: $0.00
Net Cost Difference Over 5 Years: $0.00
Lifetime Borrowing-Cost Difference: $0.00

Borrowing cost means projected interest, entered mortgage insurance, and refinance closing costs. Principal repayment is excluded because it reduces the balance you owe. Entered mortgage insurance is treated as constant until payoff; use an appropriate average if you expect cancellation. Property tax and homeowners insurance are excluded because refinancing generally does not control those costs.

📖 Understanding Mortgage Refinancing

Refinancing replaces your current mortgage with a new loan. A lower payment does not automatically mean a lower cost: the new loan may restart the term, add closing costs, or finance those costs into the balance. This calculator therefore compares monthly cash flow, a selected time horizon, and the remaining lifetime of both loans.

Rate-and-term vs. cash-out refinancing

  • Rate-and-term refinance — changes the rate, term, or both while refinancing the existing balance. This is what the calculator models.
  • Cash-out refinance — increases the balance and provides cash proceeds. Cash-out pricing and equity rules differ, so this calculator does not model it.

How the break-even math works

When closing costs are paid upfront and the new monthly principal, interest, and mortgage-insurance payment is lower, the calculator divides those costs by the monthly cash-flow savings. The result is an estimated cash-flow break-even, not a guarantee that the refinance is cheaper over every timeframe. The selected-horizon comparison separately measures projected interest, mortgage insurance, and closing costs.

✅ Refinancing usually makes sense when The new loan lowers borrowing cost over the period you expect to keep it, you can recover upfront costs before moving or refinancing again, or verified mortgage-insurance savings improve the comparison.
❌ Refinancing usually doesn't make sense when Fees outweigh the interest savings during your expected ownership period, the term reset increases lifetime cost, or the refinance relies only on a lower payment without lowering borrowing cost.

Compare lender documents, not just advertised rates

Request Loan Estimates for comparable loan types and review the interest rate, monthly principal and interest, upfront loan costs, lender credits, cash to close, and the five-year comparison. See the Consumer Financial Protection Bureau's Loan Estimate comparison guide.

Rate context comes from the Freddie Mac 30-year mortgage average and 15-year mortgage average published through FRED. These are weekly national benchmarks, not refinance offers.

💡 Refinance Pro Tips & Tricks

📏 There Is No Universal Rate-Drop Rule

A smaller rate reduction can work on a large balance with low fees, while a larger reduction can still lose money if the term is restarted or costs are high. Compare the selected-horizon and lifetime results instead of relying on a fixed percentage-point threshold.

⚡ FHA and VA Streamline Programs Have Different Rules

An FHA Streamline refinance requires an existing current FHA-insured mortgage and a documented net tangible benefit; credit-qualifying and non-credit-qualifying options exist. A VA IRRRL applies to an existing VA loan and generally does not require an appraisal or credit-underwriting package. Confirm eligibility, costs, and lender requirements through HUD or VA.

🧾 Get a No-Closing-Cost Quote Too

A lender may cover upfront costs through lender credits tied to a higher rate, or eligible costs may be added to the new balance. Neither option makes the costs disappear. Compare the rate, new principal, monthly payment, and borrowing cost over the period you expect to keep the loan.

📐 Ask for a Custom Term to Avoid Resetting the Clock

Rolling 22 years left into a new 30-year loan lowers your payment but adds years of interest. Many lenders will write a custom term (say, 22 years) so you get the lower rate without stretching the payoff — ask instead of defaulting to 30.

💸 Payment Timing Is Not a Free Month

A refinance can change the date of the next scheduled payment, but interest still accrues and prepaid interest may appear in the closing figures. Treat escrow refunds and payment timing separately from genuine interest and fee savings.

⏳ Check Your Old Loan for a Prepayment Penalty

Some older loans charge a fee for paying off early. It's rare today but worth a 5-minute check before you refinance — a penalty changes your break-even math entirely.