Mortgage Refinance Calculator

What Can This Mortgage Refinance Calculator Help You Do?

Use this mortgage refinance calculator to estimate whether refinancing your home loan may save you money, lower your monthly payment, shorten your loan term, or help you access home equity. The calculator compares your current mortgage against a new loan and estimates your new monthly principal and interest payment, monthly savings, total interest, closing costs, break-even period, lifetime savings, and projected payment schedule.

You can also include common homeownership costs such as property taxes, homeowners insurance, PMI, HOA dues, and other annual costs to get a more realistic comparison of your total monthly housing payment.

What Can This Calculator Help You Estimate?

• New monthly mortgage payment for the refinance loan
• Monthly principal and interest savings
• Total interest paid on your current loan vs. new loan
• Total taxes, insurance, PMI, HOA fees, and other housing costs
• Break-even period based on refinancing costs
• Estimated lifetime savings or lifetime cost
• Upfront refinance costs, including points and closing costs
• Cash-out proceeds or cash-in amount
• Loan-to-value ratio and PMI impact
• Monthly and annual amortization schedules

How to Use This Mortgage Refinance Calculator

Start by entering your home’s appraised value and your current mortgage information. If you know your remaining balance and current monthly principal and interest payment, select “I Know Remaining Balance.” If you only know your original loan amount and remaining loan term, select “I Know Original Loan Amount.”

Then enter the proposed new loan term, new interest rate, mortgage points, closing costs, and any cash-out amount. The calculator will estimate your new monthly payment, compare the two loans side by side, and generate monthly and annual payoff schedules.

For a more complete estimate, include your annual property tax, homeowners insurance, PMI, HOA fees, and other recurring housing costs. These amounts can affect your real monthly payment and long-term refinance savings.

Rate-and-Term Refinance

A rate-and-term refinance replaces your current mortgage with a new loan that has a different interest rate, loan term, or both. This type of refinance does not usually provide cash back at closing.

To model a rate-and-term refinance with this calculator, enter 0 in the Cash-Out Proceeds field.

Common rate-and-term refinance scenarios include:

• Refinancing from a 30-year fixed-rate mortgage into a 15-year fixed-rate mortgage
• Replacing a high-rate 30-year mortgage with a new 30-year mortgage at a lower rate
• Switching from a higher-rate 30-year loan to a lower-rate 15-year loan
• Refinancing to remove PMI once you have enough home equity
• Changing from an adjustable-rate mortgage to a fixed-rate mortgage

Cash-Out Refinance

A cash-out refinance replaces your current mortgage with a larger new mortgage. The difference between the new loan amount and the amount needed to pay off your current loan may be paid to you in cash, after closing costs and other fees.

To estimate a cash-out refinance, enter a positive number in the Cash-Out Proceeds field. For example, entering 50000 estimates a refinance where you take about $50,000 in cash from your home equity.

Homeowners often use cash-out refinance proceeds for home improvements, debt consolidation, education expenses, medical bills, or other major financial needs. However, because the amount is added to your mortgage balance, it is important to compare the long-term cost carefully.

Cash-In Refinance

A cash-in refinance is the opposite of a cash-out refinance. Instead of taking money out of your home, you bring cash to closing to reduce your loan balance. This may help you qualify for a lower rate, reduce monthly payments, shorten your loan term, or lower your loan-to-value ratio.

To estimate a cash-in refinance, enter a negative number in the Cash-Out Proceeds field. For example, entering -50000 means you plan to bring $50,000 to closing to pay down your mortgage balance.

How Much Cash Can You Take Out?

Many conventional cash-out refinance programs limit the new loan amount to about 80% of the home’s appraised value, although exact limits depend on the lender, loan type, occupancy, credit profile, and property type.

A simple cash-out estimate can be calculated as:

Available Cash = Home Value × Maximum LTV - Current Loan Balance - Closing Costs

Cash-Out Refinance Example

• Estimated home value: $500,000
• Maximum loan-to-value ratio: 80%
• Maximum new loan amount: $400,000
• Current mortgage balance: $320,000
• Estimated closing costs: $9,000

In this example:

$400,000 - $320,000 - $9,000 = $71,000

That means the homeowner may be able to receive about $71,000 in cash at closing, depending on lender approval and final closing disclosures.

Understanding the Break-Even Period

The break-even period estimates how long it may take for your refinance savings to recover your upfront costs. If your refinance costs $6,000 and your interest savings are meaningful each month, the calculator estimates how many months it may take before the refinance starts to provide a net benefit.

If you plan to sell the home, move, or refinance again before reaching the break-even point, refinancing may not make financial sense. If you plan to stay in the home for several years, a refinance with a reasonable break-even period may be worth considering.

What Are Mortgage Points?

Mortgage points, also called discount points, are upfront fees paid to the lender in exchange for a lower interest rate. One point usually equals 1% of the loan amount. For example, one point on a $300,000 mortgage would cost $3,000.

Paying points may make sense if you plan to keep the loan long enough for the monthly savings to outweigh the upfront cost. If you expect to sell or refinance again soon, paying points may not be worth it.

PMI and Refinancing

Private mortgage insurance, or PMI, is often required on conventional loans when the loan-to-value ratio is above 80%. If your home value has increased or your loan balance has dropped, refinancing may help you remove PMI if your new loan-to-value ratio is low enough.

This calculator uses your appraised value and loan balance to estimate whether PMI may apply. If your loan-to-value ratio is at or below 80%, PMI is generally not needed for a conventional mortgage scenario.

What the Amortization Schedule Shows

The refinance calculator generates monthly and annual amortization schedules for both your current loan and the new loan. These schedules show how your payments are applied over time.

The amortization tables may include:

• Monthly payment
• Interest paid each month
• Principal paid each month
• Ending loan balance
• Loan-to-value ratio
• Estimated PMI
• Total paid
• Total out-of-pocket cost

Reviewing the schedule can help you understand how fast your loan balance declines and how much interest you may pay over the life of the loan.

Mortgage Refinance FAQ

What Is Mortgage Refinancing?

Mortgage refinancing means replacing your current home loan with a new mortgage. The new loan pays off the remaining balance on your existing mortgage, and you begin making payments on the new loan instead.

Homeowners refinance to get a lower interest rate, change the loan term, switch loan types, remove PMI, reduce monthly payments, or access home equity.

What Is a Cash-Out Refinance?

A cash-out refinance lets you borrow more than you currently owe on your mortgage and receive the difference as cash at closing. The cash comes from your home equity.

Because the new loan balance is higher, your monthly payment and total interest cost may increase. It is important to compare the benefit of receiving cash now with the long-term cost of borrowing more.

What Are Typical Cash-Out Refinance Requirements?

Requirements vary by lender and loan program, but borrowers commonly need sufficient home equity, a qualifying credit score, stable income, acceptable debt-to-income ratio, and a home appraisal. Many conventional cash-out refinance programs require you to keep at least 20% equity in the home after refinancing.

What Is the Purpose of Refinancing a Mortgage?

The most common reasons to refinance are to lower the interest rate, reduce the monthly payment, shorten the loan term, switch from an adjustable-rate mortgage to a fixed-rate mortgage, remove mortgage insurance, or take cash out from home equity.

When Should I Avoid Refinancing?

Refinancing may not be a good idea if you plan to sell or move soon, if your closing costs are too high, if the new loan significantly extends your repayment period, or if the refinance increases your long-term cost. Use the break-even estimate to see whether you may keep the loan long enough to recover the refinance costs.

How Do I Calculate Home Equity?

Home equity is the difference between your home’s current market value and the amount you still owe on your mortgage.

For example, if your home is worth $400,000 and your mortgage balance is $325,000, your equity is $75,000. That equals 18.75% equity in the home.

Can Refinancing Help Remove PMI?

Yes, refinancing may help remove PMI if your new loan-to-value ratio is 80% or lower and you meet lender requirements. Home value appreciation, principal payments, or a cash-in refinance can all help reduce your loan-to-value ratio.

Is a 15-year Refinance Better Than a 30-year Refinance?

A 15-year refinance usually has a lower interest rate and can help you pay off your mortgage faster, but the monthly payment is typically higher. A 30-year refinance may provide a lower monthly payment, but it can result in more total interest over time. The better choice depends on your budget, timeline, and financial goals.

Does Refinancing Always Save Money?

No. A refinance can lower your monthly payment but still cost more over the full life of the loan if you extend the repayment term, pay high closing costs, or borrow additional cash. Always compare monthly savings, total interest, upfront costs, and lifetime savings before deciding.

Disclaimer: This calculator provides estimates for educational purposes only. Actual refinance terms, rates, closing costs, APR, PMI, cash-out limits, and monthly payments may vary by lender, loan program, credit profile, property type, appraisal, taxes, insurance, and state or local requirements. Always review your official Loan Estimate and Closing Disclosure before making a refinancing decision.