Mortgage Refinance Calculator
Calculate if refinancing your mortgage saves money. Compare old vs new payments, break-even point, and total lifetime savings.
How This Calculator Works
Calculation methodology and assumptions
This calculator computes new mortgage payments after refinancing. To determine if refinancing makes sense, compare your new total cost (including closing costs, typically 2-5% of loan) against continuing your current mortgage. The break-even point is when cumulative savings exceed refinance closing costs.
How to Use This Mortgage Calculator
- 1
Enter the home price
Input the purchase price of the home you're considering. The calculator pre-fills Mortgage Refinance's median home value as a starting point.
- 2
Set your down payment
Enter your down payment percentage. Conventional loans typically require 5–20%, FHA loans as low as 3.5%, and VA loans may require 0% down. A larger down payment reduces your monthly payment and eliminates PMI at 20%.
- 3
Input your interest rate
Enter the rate from your lender's quote or pre-approval letter. Rates vary by credit score, loan type, and term length. Check Bankrate or Freddie Mac's PMMS for current averages.
- 4
Choose your loan term
Select 30-year (lower payments, more total interest) or 15-year (higher payments, significant interest savings). A 15-year loan on $300K saves roughly $150K+ in total interest.
- 5
Review the full cost breakdown
Look beyond the monthly principal & interest payment. The total includes property taxes, homeowner's insurance, and PMI if applicable. Your true "housing cost" is this full PITI amount.
Example Calculation
Here's a realistic mortgage scenario for a home purchase in Mortgage Refinance.
You're buying a home for $350,000 with 10% down ($35,000), borrowing $315,000 at 6.75% for 30 years. Your monthly principal & interest payment would be approximately $2,043. Add estimated property taxes of $350/month, homeowner's insurance of $150/month, and PMI of $132/month (since you're under 20% down). Your total monthly housing cost is approximately $2,675.
Result: Over the 30-year life of this loan, you'll pay approximately $420,480 in total interest — more than the original home price. Making just one extra payment per year could shave 4–5 years off the loan and save $60K+ in interest. That's why understanding the full amortization picture matters.
What Affects Your Results
Credit Score
Your credit score is the single biggest factor in your rate. A 760+ score might get 6.5%, while a 660 score could mean 7.5% — adding $200+/month on a $300K loan.
Loan-to-Value Ratio
Higher down payments (lower LTV) get better rates and eliminate PMI. Crossing the 80% LTV threshold removes PMI, saving $100–$300/month.
Debt-to-Income Ratio
Lenders cap your total monthly debt payments (including the new mortgage) at 43–50% of gross income. High existing debt limits how much you can borrow.
Loan Type
Conventional, FHA, VA, and USDA loans each have different rate structures, down payment requirements, and fee schedules. VA and USDA often offer the lowest rates for eligible borrowers.
Property Taxes & Insurance
Mortgage Refinance property tax rates and local insurance costs add significantly to your monthly housing payment. These vary dramatically by location.
Tips for Mortgage Refinance Residents
- Get pre-approved, not just pre-qualified. Pre-approval involves a hard credit pull and income verification, giving you a firm budget and making your offers more competitive.
- Compare at least 3 lenders. Rates and fees vary significantly — even 0.25% lower saves thousands over the loan's life. Don't just check big banks; credit unions and online lenders often have competitive rates in Mortgage Refinance.
- Consider points vs. rate. Paying 1 discount point (1% of loan amount) typically lowers your rate by 0.25%. This pays off if you stay in the home 4+ years.
- Don't drain your savings for a larger down payment. Keep 3–6 months of expenses in reserve after closing. Unexpected repairs are common in the first year of homeownership.
- Factor in closing costs (2–5% of loan amount) when budgeting. These are separate from your down payment and due at closing.
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StateCalc Team
Editorial Team
The StateCalc team builds free financial calculators using data from official government sources including the IRS, U.S. Census Bureau, BLS, and state revenue departments. All formulas are validated by an automated test suite and cross-referenced against published data.
Our editorial standardsFrequently Asked Questions
When should I refinance my mortgage?
Consider refinancing when you can reduce your rate by at least 0.5-1%, when you want to switch from adjustable to fixed rate, or when you want to shorten your loan term. Factor in closing costs to ensure you break even within 2-3 years.
How much does refinancing cost?
Refinancing typically costs 2-5% of the loan amount in closing costs. On a $300,000 loan, that is $6,000-$15,000. Some lenders offer "no-closing-cost" refinances at a slightly higher rate.
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