Mortgage Refinance Calculator

When interest rates drop or market values rise, it’s a good time to think about refinancing.

First, enter the loan balance, payment, and interest rate for your current loan. Then, select a focus: do you want to reduce your term length or monthly payments? Adjust the term length, interest rate, cash out amounts, and closing costs for the new loan. This shows how these factors influence your total costs, how much you can save, and when you’ll break even on monthly savings vs. refinancing costs.

It depends! Buying a home isn’t just a one-and-done deal, and the decisions you made when you bought the home impact when you can refinance. This includes:

• Your mortgage type. The details of a mortgage generally cover specifics regarding what is allowed in the event of mortgage-rate fluctuations.
• How soon can you refinance a mortgage given your loan agreement? Did you and your lender agree on a “seasoning period”—the amount of time you must wait before refinancing? If so, plan your refinancing options around that given timeframe. Typically, most lenders have a “seasoning period” of six months, so you cannot refinance until at least six months after the official start of your loan.

You may be asking yourself, “Should I refinance my mortgage or not?” A traditional mortgage payment is made up of different costs—principal, interest, property taxes, homeowners insurance (PITI), and possibly even private mortgage insurance (PMI). And many of those costs directly correlate to a homebuyer’s reasons to or not to refinance:

• Lower Interest Cost: When you refinance a loan due to lower mortgage interest rates, the “interest” part of your monthly payment could change for the better and result in a lower overall monthly payment. Refinancing a home loan essentially updates the original terms of your mortgage to ‘fit’ the current economic landscape and ensure you’re not overpaying in a falling market.
• Change Loan Terms: You may sign one type of mortgage (i.e., an adjustable rate mortgage) but change your mind and want a different type (i.e., a fixed-rate mortgage). When this happens, refinancing allows you to change the initial loan terms.

• Remove private mortgage insurance (PMI): Private mortgage insurance protects the lender if a borrower is unable to pay their mortgage. Homebuyers who put less than 20% down on their home purchase are considered riskier by lenders and almost always required to pay for PMI. PMI mitigates the lender's risk of financial loss in case of default.

  Because this insurance is contingent on the borrower's equity in the home, homeowners may be able to refinance and eliminate PMI if they've made a lump sum payment toward the loan principal, thus increasing their equity, or if the property's value increases sufficiently.

• Shorten the loan term: Some homeowners refinance to lessen their loan term. Refinancing can help pay off your home faster, even if it means higher monthly payments.

Refinancing depends on your financial goals, current situation, and economic conditions. To decide, consider the reasons listed above, assess your unique circumstances, and use this mortgage refinance calculator to evaluate potential savings. A financial professional can also provide valuable guidance.

A cash-out refinance replaces your current mortgage with a new, larger loan and gives you the difference between what your home is worth and what you owe in cash. When considering a cash-out refinance, remember that it can be a useful strategy for funding home improvements, consolidating debt, or covering major expenses. But, it’s important to consider the potential downsides, such as higher interest costs over time and the risk of owing more than your home is worth if property values decline. Before choosing a cash-out refinance, evaluate your financial goals and whether this option aligns with your long-term plans. Use a mortgage refinance calculator to determine if a cash out refi is right for you.