Mortgage Refinance Calculator

Divide your closing costs by the monthly savings. With $6,000 of costs and a payment that is $240.17 lower, you break even after about 25 months, so the refinance only pays off if you keep the loan longer. In the CFPB’s example, paying $675 more at closing to cut a $180,000 loan from 5% to 4.875% saves about $14 a month, which takes roughly four years to earn back.

Add the closing costs to the new payments. Take $300,000 at 7% with 28 years left, refinanced into a 30-year loan at 6% with $6,000 of closing costs paid at closing. You pay $6,000 plus 360 payments of $1,798.65, which is $647,515 in payments, $347,515 of it interest. Your current loan would cost 336 more payments of $2,038.83, or $685,045, so refinancing comes out about $31,500 ahead in this example.

The calculator starts from your balance, adds any cash out and any closing costs you roll in, and applies the standard loan formula at the new rate and term. $300,000 at 6% over 30 years is $1,798.65 a month; over 15 years it is $2,531.57. That is principal and interest only. Property taxes, homeowners insurance and mortgage insurance are added if your lender collects them with the payment.

It depends on the loan size, the closing costs and how long you will keep the loan. Say you have 30 years left and refinance into a new 30-year loan. On $300,000, going from 7% to 6% lowers the payment by $197.26 a month, so $6,000 of closing costs are earned back in about 30 months. On $100,000 the same drop saves $65.75 a month, and the same $6,000 would take about 91 months.

They vary with the loan, the lender and the state. They include lender charges, points, third-party services such as the appraisal and title insurance, and government fees. The CFPB reported that median closing costs on home mortgages were $6,000 in 2022. Your Loan Estimate lists the estimated amount, and you can shop separately for some of the services. Enter any points as part of the closing costs; one point is 1% of the loan.

Yes, if you qualify. A shorter loan raises the payment and cuts the interest. On a $300,000 balance at 7% with 28 years left, a 15-year loan at 6% costs $2,531.57 a month, $492.74 more than the $2,038.83 you pay now, but the interest falls from $385,045 to $155,683. After $6,000 of closing costs that is about $223,363 less in total. Set the new term to 15 years or read the table above.

Lenders weigh your credit, your income against your debts and the loan-to-value ratio, so too little equity or too much debt can stop an application. Fannie Mae’s guide, for example, sets a maximum debt-to-income ratio of 36% for manually underwritten loans, up to 45% with enough credit and reserves, and 50% for loans run through its automated system. For a cash-out refinance it also requires that your current mortgage is at least 12 months old, with some exceptions.

Every lender and loan type sets its own limit on the loan-to-value ratio, which is the new loan divided by the home’s appraised value. The CFPB says private mortgage insurance usually also applies to refinancing a conventional loan when your equity is under 20%. Fannie Mae’s Selling Guide even lays out extra requirements for limited cash-out refinances, its term for a refinance that returns little cash, with a loan-to-value ratio of 95.01% to 97%, so some programs work with very little equity.

Usually more than for a plain refinance, because lenders set a lower cap on the new loan when you take cash out. Fannie Mae’s guide describes loan-to-value ratios up to 97% for a limited cash-out refinance, which returns only a small amount of cash, while HUD Mortgagee Letter 2019-11 lowered the maximum for FHA cash-out refinances to 80% of the home’s adjusted value. That means keeping at least 20% equity after the cash comes out. Conventional lenders set their own limits, so ask yours.

The new loan can be at most your home’s value times the lender’s limit. Subtract what you owe and any closing costs you add to the loan, and what is left is the cash. With a $400,000 home, an 80% limit, a $250,000 balance and $6,000 of costs added to the loan, the limit is $320,000 and the most cash is $64,000. Enter the amount you want in the cash-out field to see the payment.

On its own it does not. It replaces your mortgage with a bigger one, and a CFPB research post notes that payments and loan terms are both likely to increase. Taking $50,000 out of a $300,000 balance (7%, 28 years left) with a new 30-year loan at 6.5% and $6,000 of costs added to the loan lifts the payment from $2,038.83 to $2,250.16. Your total monthly bills can fall if the cash pays off other debts, but those debts then become part of a loan your home secures.

That depends on what the cash replaces and on the rate. Closing costs usually apply, and the larger balance carries interest for the whole term: with $50,000 of cash out on a $300,000 balance at 7% with 28 years left, a new 30-year loan at 6.5% and $6,000 of costs added to the loan, interest and costs come to $75,013 more over the loans. The CFPB advises considering the rate carefully, especially if it is higher than your current one, and says a cash-out refinance may be more or less expensive than a HELOC. Compare with the home equity loan calculator.

Under Fannie Mae’s rules the cash can be used for any purpose, and a CFPB research post notes that borrowers often use it to pay down other debts, fund home repairs and pay for education. Whether that is a good reason depends on the rate, the costs and your budget. The calculator shows what the extra balance adds to the payment and to the interest, so you can weigh it against the alternatives.

The CFPB points to the rate, especially a new rate above your current one, and a CFPB research post reminds borrowers that the home secures the loan, so missed payments can lead to foreclosure. Things to check: whether the closing costs take a large share of the cash, whether the higher payment fits your budget, and whether you will keep the loan long enough for the extra interest to make sense. The lifetime savings result shows that extra cost.

Keep the new term no longer than the time you have left, or shorter. Take $300,000 at 7% with 28 years left and $6,000 of closing costs. A new 30-year loan at 6% saves about $31,531 in interest and costs, but a 28-year loan, as long as the time left, saves about $59,000 because it adds no extra months of interest. Its payment is $46.72 higher: $1,845.37 against $1,798.65. Lower closing costs and extra principal payments also cut interest.

Yes. Adding them means no cash at closing, but a bigger loan, a higher payment and interest on the costs for the whole term. The CFPB says a loan advertised as having no closing costs either carries a higher rate or adds the costs to the loan amount, and a higher loan amount increases your payments and reduces your equity. For $300,000 at 7% with 28 years left refinanced into a 30-year loan at 6%, adding $6,000 of costs to the loan cuts the monthly savings from $240.17 to $204.20 and the lifetime savings from $31,531 to $24,581.

It assumes fixed rates and equal payments, and it leaves out property taxes, insurance and mortgage insurance. It ignores prepayment penalties, which the CFPB says some loans carry in the first years. Your current payment is worked out from your balance, rate and time left, so extra payments or a different payoff amount can make your real figures differ. Your lender’s Loan Estimate has the numbers that count.