Mortgage Refinance Calculator

A mortgage refinance calculator can help you compare your existing loan to a new one. Gauge what refinancing would mean for your monthly payment, your payoff timeline, and the total interest you’ll pay in the long run.

Our mortgage refinance calculator will reveal a few things: How your old loan payment compares to your new one, how much interest you’ll pay over time, and the point at which you’ll break even on the costs of refinancing (that is, when you’ll start saving more than you spent).

To use the calculator, you’ll need the following information:

Current loan information

• Original loan amount: The amount you borrowed when you initially took out your loan.
• Original loan term: Your loan’s repayment period, expressed in years.
• Current interest rate: How much you pay in interest on your loan. You should be able to find it on your original loan estimate or closing papers if you’re not sure.
• Remaining term: How many years you have left in your repayment period, expressed in years.

Proposed loan information

• New interest rate: How much you’ll pay in interest on your new loan.
• New loan term: Your new loan’s repayment period, expressed in years.
• Cash-out refinance: Indicate whether or not you’ll be doing a cash-out refinance. If you are, enter the amount of equity you plan on taking out in this field. You’ll also need to enter your home’s estimated value in the next field.
• Home value: Your home’s current value. In many cases, your lender will ask you to get a home appraisal to determine the value of your home before approving your new loan.
• Closing costs: Total amount of closing costs you’ll pay with the new loan. Mortgage closing costs can range from 2% to 5% of the loan amount, averaging about $5,000.

There are several reasons why you might want to refinance your mortgage loan, including:

1. To save on interest: Mortgage rates are at record lows right now. If you’re able to refinance to a lower interest rate than what’s on your current mortgage, it could save you thousands of dollars over the loan term.
2. To pay off your loan sooner: Refinancing into a shorter-term loan can be smart, too. By going from a 30-year term to a 15- or 20-year one, for example, you could shave years off your payoff timeline and reduce the interest you pay in the long run.
3. To change your loan type: You might also consider refinancing if you have an adjustable-rate loan. Refinancing into a fixed-rate mortgage would protect you from any rate increases and give you an affordable, consistent payment for the remainder of your loan.

This calculator can help you decide if refinancing makes sense for your current situation. Be sure to cover the following steps before applying for a refinance:

Compare your monthly payments
See what your monthly payment would be on your new loan versus your old one. If it could free up cash flow or ease your household’s financial burden, it might be a smart move.

See how much interest you’re paying
A lower interest rate or shorter loan term will reduce the amount of interest you’ll pay in the long run (there’s less time to accrue interest on the latter). Compare how much you’d pay in interest over your loan term on both your old mortgage and new mortgage. The savings could be big.

Figure out your breakeven point
The breakeven point is when the savings of your refinancing equal or outweigh its costs. On this calculator, you’ll see it displayed as years. Generally, it only makes sense to refinance if you know you’ll be in the home for at least that many years — ideally longer.

See more rates: 15-Year Fixed Refinance Rates

When you refinance your mortgage, you’ll go through a process similar to the one you went through when purchasing your home. Here are the steps you can expect to take to refinance your home loan:

1. Set a goal: Ask yourself why you’re refinancing in the first place. Is it to get a better mortgage rate? To access your home equity? Maybe both? Setting a clear goal will put things into focus for the rest of the process and help determine the best refinance loan for you.
2. Review your financials: You’ll want to ensure your credit score and debt-to-income (DTI) ratio are within lenders’ desired range. To qualify for the lowest rates, lenders generally want you to have an excellent credit score (750 or higher) and a DTI ratio of less than 36%. Make sure your income is stable as well.
3. Compare refinance rates and fees from different lenders: Even a small difference in interest rates can equal thousands of dollars in savings. It’s important to shop around and compare lenders for the lowest rate. If you’re doing a cash-out refinance, find out how much equity the lender will allow you to borrow. Most lenders only allow you to borrow up to 80% of your home equity.
4. Prepare your documents: Once you’ve found the right loan and lender, you’ll want to gather all of the necessary documents to streamline the application process. In general, you can expect to provide tax returns and W-2s from the last two years, pay stubs and bank statements from the last two months, proof of homeowners insurance, and asset statements (e.g., retirement accounts and brokerage accounts).
5. Apply for the loan: Submit your documents to your lender to complete the application process. You should receive a loan estimate within three business days of applying. Your loan estimate shows key information about your loan, such as the loan amount, interest rate, and closing costs.
6. Get a home appraisal: Your lender will most likely require you to get a home appraisal as part of the underwriting process to determine how much your home is worth.
7. Go through underwriting: The time to refinance a mortgage varies depending on the lender and current market conditions, but it’s usually the lengthiest step in the refinancing process. Your lender might be able to close in just a few weeks; it’s more common, though, for the process to take anywhere between 30 to 60 days.
8. Close the loan: On closing day, you’ll meet with your lender, review your new loan term, and sign the paperwork to make everything official. If you’re doing a cash-out refinance, you’ll receive the funds from your lender after you close the loan.

If you’ve done your research and believe refinancing is the right move, start comparing your options right away. Mortgage rates change daily and vary by lender.

Mortgage FAQs

When will mortgage rates go down?

While experts initially predicted rates were going to drop in 2024, it’s now likely that rates will not decline significantly until later this year or early 2025. At the Federal Reserve meeting earlier this month, officials stated that it could take longer than previously expected for inflation to cool, which will delay the reduction of interest rates (currently at a 23-year high).

Between the high interest rates, low inventory, and high home prices – which CoreLogic reported rose 5.5% over the past year – prospective homebuyers are experiencing several financial obstacles that could make it nearly impossible for their housing dreams to become a reality. Additionally, many current homeowners are choosing to hold off on selling their properties because of high interest rates and home prices, a phenomenon dubbed “lock-in effect,” according to a Fannie Mae study.

How often do mortgage rates change?

Interest rates tend to change daily, and sometimes rates even change during the day. You can compare current mortgage rates from our partner lenders at any time. You will get an idea of the interest rate, APR, closing costs, and monthly payment, but you should bear in mind that these numbers will change depending on your credit score and other financial details.

Daily changes can usually be measured in hundredths of a percentage point. For example, average rates might be 7.12% on Tuesday and 7.06% on Wednesday. However, sudden and unexpected major events like a public health crisis or bank failure can make rates more volatile.

How can I get the lowest mortgage rate?

You can get the best mortgage rate by making yourself a low-risk borrower and submitting applications with multiple lenders. Here are a few tips:

• Don’t miss payments: If you have credit cards, student loans, auto loans, or other debts, make sure you’re never more than 30 days late. Late payments can knock you down into a lower credit score tier.
• Pay down debt: Reducing the total debt you owe can help in two ways. First, lowering your credit utilization ratio can boost your credit score. Second, it can lower your debt-to-income ratio (DTI).
• Choose a shorter term: The interest rate is often at least 0.5 percentage points lower on a 15-year mortgage than a 30-year mortgage.
• Increase your down payment: Investing more of your own money upfront makes you less likely to walk away from your home and your mortgage.
• Shop around: You won’t know if you’re getting the lowest rate unless you submit applications and get loan estimates from multiple lenders. 
• Negotiate: You may be able to use competing loan estimates to secure a better deal.

What is the difference between an adjustable-rate mortgage and a fixed-rate mortgage?

A fixed-rate mortgage has the same interest rate for the entire loan term. On a 30-year mortgage with a fixed rate of 6%, your interest rate will be 6% for all 30 years.

An adjustable-rate mortgage (ARM) has a fixed interest rate at the beginning of the loan term. After that, the rate adjusts periodically.

For example, a 5/1 ARM would have the same interest rate every year for the first five years. After that, the rate would adjust once per year for the remaining 25 years of the 30-year term. An ARM’s changes are subject to a floor and a ceiling as well as caps on annual increases.

Fixed-rate mortgages, which tend to be more popular than ARMs, provide predictability and peace of mind. For the average person buying a house, it’s easier to budget for a monthly payment that never changes.

An ARM may be more attractive if you’re taking out a jumbo loan. The initial interest rate on an ARM is often lower than the rate on a 30-year fixed-rate mortgage. Interest rate differences have a bigger impact on your monthly payment the larger your loan is.

On a $1 million 30-year home loan with a $200,000 down payment, the monthly payment would be $6,181 if the interest rate was 7.25%. If an ARM offered a 6.75% interest rate, you could lower your monthly payment to $5,912, a savings of $269 per month or $16,140 over five years.

What is the difference between APR and interest rate?

The interest rate is the percentage of your loan balance you pay annually to borrow money. For example, if your interest rate is 7% and your loan balance is $100,000, you’ll pay $7,000 in interest for one year.

The APR, or annual percentage rate, combines the interest rate and all the other costs associated with the loan. For a mortgage with closing costs, the APR will be higher than the interest rate. Adding to the example above, if your closing costs are $5,000, your APR will be 7.537%.

Read more about the differences in APR and interest rates.

What are discount points and how do they impact my rate?

Paying discount points allows you to lower your mortgage rate by prepaying interest as a lump sum of cash at closing.

For example, you might be able to get an interest rate of 5.875% by paying 3.035 discount points, which would cost $10,623 on a $350,000 loan. On the same loan, your interest rate might be 6.375% if you paid 1.158 discount points, which would cost $4,053.

"With a 15-year mortgage, the monthly payment would be $2,930 on the first loan and $3,025 on the second, a difference of $95."