Mortgage Refinance Calculator
Determine if refinancing your mortgage will save you money with our free calculator. Refinancing replaces your existing loan with a new one, potentially lowering your rate, reducing your payment, or changing your loan term to better fit your financial goals.
Types of Refinance Options
| Refinance Type | Purpose | Typical Savings Trigger | Rate-and-TermLower rate or change termRate drop of 0.5-1%+ Cash-OutAccess equity as cashNeed funds, have 20%+ equity Cash-InLower LTV, eliminate PMIHave cash to reduce balance Streamline (FHA/VA)Simplify existing gov loanAny rate improvement | HARP Replacement | High LTV conventional | Underwater or low equity |
Refinance Break-Even Analysis
``javascript
function calculateRefinanceBreakEven(currentPayment, newPayment, closingCosts) {
const monthlySavings = currentPayment - newPayment;
if (monthlySavings <= 0) {
return { worthIt: false, message: 'New payment is not lower' };
}
const breakEvenMonths = Math.ceil(closingCosts / monthlySavings);
const breakEvenYears = (breakEvenMonths / 12).toFixed(1);
return {
worthIt: true,
monthlySavings: monthlySavings.toFixed(2),
breakEvenMonths,
breakEvenYears: breakEvenYears + ' years',
fiveYearSavings: ((monthlySavings * 60) - closingCosts).toFixed(2)
};
}
function compareRefinanceScenarios(loanBalance, currentRate, newRate, termYears) {
const monthlyRate = (rate) => rate / 100 / 12;
const numPayments = termYears * 12;
const calcPayment = (balance, rate) => {
const r = monthlyRate(rate);
return balance * (r * Math.pow(1 + r, numPayments)) / (Math.pow(1 + r, numPayments) - 1);
};
return {
currentPayment: calcPayment(loanBalance, currentRate).toFixed(2),
newPayment: calcPayment(loanBalance, newRate).toFixed(2),
monthlySavings: (calcPayment(loanBalance, currentRate) - calcPayment(loanBalance, newRate)).toFixed(2)
};
}
``
When Refinancing Makes Sense
The traditional rule suggests refinancing when rates drop 1% or more, but today's market often makes sense at 0.5% with low closing costs. Consider how long you plan to stay in the home—if you will move before reaching break-even, refinancing may not pay off. Also weigh whether you want to extend your term (lower payments but more interest) or shorten it (higher payments but faster payoff).