Refinance Calculator

To estimate how much you could save each month with a refinance, first you’ll need to enter some information about your current mortgage. After that, you’ll add information about the new mortgage you’d like to apply for.

Your current mortgage information

1. Original amount: Start by entering how much you originally borrowed on the loan you’re refinancing.
2. Loan start date: Next, add the date your current loan started. This information should be on your closing disclosure or monthly mortgage statement.
3. Loan term: Select a 30- or 15-year term.
4. Interest rate. Enter your current interest rate.

Your new loan information

1. Loan term: Choose between a 30- or 15-year term.
2. Interest rate: Choose a realistic refinance interest rate. You can base this on loan estimates you have received or current refinance rates.
3. Closing costs: Our calculator automatically assumes refinance closing costs equal to 2% of your new loan amount — actual costs may range between 2% and 6% of your loan amount.
4. Length of Ownership: This is how long you plan to live in your home after the refinance.

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How to find your break-even point

Once you’ve entered in the information above, our refinance calculator will give you one of two results:

1. “Refinance makes sense: You’ll break even before you plan on moving.” This means the refinance will pay for itself before the date you put in the “length of ownership” field.
2. “Refinancing makes sense if you plan to stay for more than ___ years: You’ll not break even before you plan on moving.” This signals that your break-even point is after the date you put in the “length of ownership” field. The calculator will fill in the blank here, telling you how long you’ll need to stay in your home to start seeing significant savings after breaking even. The calculator considers one full year of savings, after you’ve broken even, to be “significant.”

A refinance may make sense for you if:

• You can lower your interest rate. Besides the savings on your monthly payment, a lower rate can save you thousands of dollars in interest charges over the life of your loan.
• You want to pay off your loan faster. If you can swing the higher payment, switching from a 30-year to a 15-year mortgage means you’ll be mortgage-free much faster.
• You want to switch from an adjustable-rate mortgage (ARM) to a fixed rate. If your ARM rate is going to adjust soon, refinancing to a fixed-rate loan may give you peace of mind. It can also make budgeting easier, since you’ll know exactly what to expect each month.
• You want to tap some of your home equity. Converting some of your home equity to cash with a cash-out refinance can help you pay off credit card balances or make improvements that will increase your home’s value.
• You want to remove someone from the mortgage. If you’re going through a divorce and one party wants to remain in the house, you may need to remove the other from the mortgage. And, while it’s theoretically possible to remove someone’s name from a mortgage without refinancing, it can be complicated. In most cases, a refinance is the simplest solution.
• You want to stop paying FHA mortgage insurance. If you currently have a mortgage insured by the Federal Housing Administration (FHA), you’re on the hook for annual FHA mortgage insurance premiums. The most common way to get out of this obligation is to refinance into a conventional loan.

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Here’s a quick overview of how to refinance a mortgage:

1. Pick your financial goal. Do you want to alter your interest rate, loan term or both? Are you looking for lower payments or a faster payoff?
2. Decide on a loan program. Choose a government-backed refinance loan if you need to refinance with bad credit, or a conventional loan if you have a high credit score and more than 20% equity in your home.
3. Shop for a lender and lock your rate. Once you’ve reviewed loan estimates and chosen the best lender for your needs, ask your lender for a mortgage rate lock. Mortgage rates change daily and your rate isn’t guaranteed until it’s locked in.
4. Gather your financial paperwork. In most cases, you’ll need to provide documentation of your income, employment and debts. This usually means current pay stubs, W-2s and bank statements. You’ll also need information about the loan you’re paying off.
5. Get your home appraised. Your refinance lender will want to evaluate your home’s current value. So, unless you’re eligible for an appraisal waiver, you should spruce up your house in preparation for a home appraisal.
6. Finalize your closing disclosure and enjoy your savings. Once your loan is approved, you’ll receive a closing disclosure three business days before you sign. If everything looks correct, sign your papers and you’re all done.