Refinance Calculator

Divide your closing costs by your monthly saving. With $6,000 in costs and a saving of $187.43 a month, you break even after 32.01 months, so in month 33. The calculator rounds up to the first full month. Use the payment for principal and interest only, because taxes and insurance stay the same whichever loan you have.

Often, yes, if you'll stay long enough to recover the costs. On $300,000 with 25 years left, going from 7% to 6% saves $187.43 a month and breaks even in 33 months. A drop of half a point, to 6.5%, saves $94.72 a month and takes 64 months to recover the same $6,000. The smaller the drop, the longer you need to stay.

Closing costs usually run about 2% to 6% of the loan amount. They include the lender's origination fees, an appraisal, title insurance, recording fees and any points you buy. On a $300,000 loan, 2% is $6,000. Some lenders offer a no-closing-cost refinance, which usually means a higher rate or costs added to the balance.

The lender covers the closing costs in exchange for a higher rate, or adds them to your loan balance. With no costs up front, you start saving from the first month. For example, refinancing $300,000 from 7% to 6.25% with no costs saves $141.33 a month right away. Set closing costs to $0 in the calculator to compare it with a lower rate that has costs.

Yes. A refinance is a new loan with a new term, so a new 30-year loan starts 30 years of payments again. If you have 25 years left and take a new 30-year loan, you add five years. To avoid that, choose a term that matches or beats the years you have left, or pay extra each month on the new loan.

If you can afford the higher payment, a 15-year loan usually has a lower rate and costs far less in interest. Moving $300,000 from 7% with 25 years left to 5.5% over 15 years raises the payment by $330.91 a month, but it saves about $188,876 overall. Make sure the payment still leaves room for savings and emergencies.

Skip it if you plan to move before the break-even point, if the new term would raise your total cost, or if the costs wipe out the savings. Also be careful about a cash-out refinance for spending, because it turns home equity into new debt secured by your house. The calculator's lifetime figure shows whether the deal saves money overall.

Your score is one of the main factors in the rate you're offered. A higher score usually means a lower rate, which raises your monthly saving and shortens the break-even time. Before you apply, check your credit reports for errors and avoid opening new accounts. Getting quotes from several lenders within a short period generally counts as a single inquiry for scoring purposes.

Many lenders allow it, but you may have to pay mortgage insurance, which reduces your saving. Some government programs have their own refinance options for FHA, VA and USDA loans. If your home has risen in value, a new appraisal could show you've reached 20% equity, which can remove PMI and add to what you save each month.

A standard refinance isn't a taxable event, because you're replacing one loan with another. Points you pay may be deductible over the life of the loan rather than all at once, and mortgage interest may be deductible if you itemize. Rules change and depend on your situation, so check IRS guidance or ask a tax professional.

A rate-and-term refinance changes your rate, your term or both, without borrowing more. A cash-out refinance borrows more than you owe and pays you the difference. Cash-out loans often carry slightly higher rates. This calculator models rate-and-term refinancing, so enter your current balance and compare the new rate and term.