Refinance Calculator

Frequently asked questions

What is a break-even point in refinancing?

The break-even point is the number of months it takes for your monthly savings from the lower rate to equal the closing costs you paid. If you plan to stay in the home longer than the break-even period, refinancing usually makes financial sense.

Should I roll closing costs into the new loan?

Rolling closing costs into the loan avoids out-of-pocket cash but increases your loan balance, meaning you pay interest on those costs for the life of the loan. Paying out of pocket is cheaper long-term if you have the cash available. Toggle the option in the calculator to compare.

When does refinancing make sense?

Refinancing is generally worthwhile when the new rate is at least 0.5% to 1% lower than your current rate, you plan to stay in the home past the break-even point, and closing costs are reasonable relative to monthly savings.

What is a cash-out refinance?

A cash-out refinance lets you borrow more than you currently owe and take the difference as cash, typically used for home improvements or debt consolidation. Your new loan balance becomes the old balance plus the cash-out amount, which increases monthly payments and total interest.

How are closing costs estimated?

Closing costs typically range from 2% to 5% of the loan amount and include lender fees, appraisal, title insurance, and taxes. You can enter them as a dollar amount or a percentage of the new loan in this calculator.

Will refinancing always save me money over the loan's life?

Not always. Extending your term (for example, refinancing 27 years remaining into a new 30-year loan) can lower monthly payments but increase total lifetime interest. The calculator shows both monthly savings and lifetime interest comparison so you see the full picture.