Mortgage Refinance Calculator

Refinancing typically costs 2-5% of the loan amount. On a $250,000 mortgage, that's $5,000-$12,500. Common costs include application fees, appraisal fees, title insurance, origination fees, and discount points. Some lenders offer "no-closing-cost" refinances, but they usually compensate with a slightly higher interest rate.

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A typical refinance takes 30 to 45 days from application to closing. The timeline depends on how quickly you provide documentation, the appraisal schedule, title search processing, and the lender's current workload. Streamline refinances (like FHA Streamline or VA IRRRL) can close in as few as 15-20 days since they require less documentation.

Refinancing may cause a temporary dip of 5-10 points on your credit score due to the hard inquiry and new account. However, if refinancing lowers your monthly payment and helps you maintain on-time payments, it can improve your score over time. If you rate-shop within a 14-45 day window (depending on scoring model), multiple mortgage inquiries count as a single inquiry.

It's more challenging but not impossible. If you owe more than your home is worth, conventional refinancing requires PMI or a higher rate. Government-backed programs may help — for example, the FHA Streamline program doesn't require an appraisal for existing FHA borrowers, and the VA IRRRL program works similarly for VA loans. Talk to your lender about available options for your specific situation.

Refinancing to a 15-year term typically offers a lower interest rate and saves tens of thousands in total interest, but your monthly payment will be higher. A 30-year term keeps payments low, giving you more monthly flexibility. The best choice depends on your financial goals: choose a shorter term if you can comfortably afford the higher payment and want to be debt-free sooner; choose a longer term if you need cash flow flexibility or want to invest the difference elsewhere.

A rate-and-term refinance (what this calculator models) replaces your current mortgage with a new one at different terms — the loan amount stays roughly the same. A cash-out refinance lets you borrow more than you currently owe and receive the difference as cash, which can be used for home improvements, debt consolidation, or other expenses. Cash-out refinances typically come with slightly higher interest rates.

Discount points are an upfront payment to reduce your interest rate — typically 1 point (1% of the loan amount) lowers the rate by 0.25%. Points make sense when you plan to keep the loan long enough for the monthly savings to exceed the upfront cost. Use this calculator to compare scenarios with and without points by adjusting the "Points" and "New Interest Rate" fields. If you plan to stay in the home for many years, points often pay for themselves. If you might move or refinance again soon, skip the points.

The P&I calculations use the standard amortization formula and are accurate to the cent for fixed-rate loans. The break-even calculation uses a simple payback method (closing costs / monthly savings), which is a good approximation. A more precise analysis would account for the time value of money and tax deductions, but the simple method gives a reliable rule-of-thumb answer. This calculator does not account for property taxes, insurance, or PMI — use our Payment Calculator for a full PITI breakdown.