A "should I refinance" calculator compares your current mortgage against a proposed new loan to show whether refinancing would lower your payment, cut your total interest, or both.
The principal you originally borrowed.
The rate you're paying today.
Most commonly 15 or 30 years.
How long you've been paying off this loan.
The rate on the proposed refinance.
A shorter term pays off faster; a longer one lowers the payment.
Equity taken as cash, added to the new loan balance.
Typically 2% to 5% of the new loan amount.
Paid on the new loan, applied straight to principal.
Break-even in about 28 months on $11,265 of closing costs.
This refinance improves at least one of your payment or lifetime interest — weigh the break-even against how long you plan to stay.
These results are estimates, not predictions. They're calculated from the figures you entered and assume your rate of return and inflation rate hold steady every year, which real markets don't do. Change any input and the result changes. Use this to compare scenarios, not to plan around a specific number.
Enter your original loan amount, current interest rate, original term, and how long you've been paying it off. Then enter your proposed new interest rate, new term, and any cash-out amount. You can also add extra payments to see their combined effect. The calculator compares your current and new loan side by side.
Current loan details, including your original amount, rate, term, and time already paid, establish your baseline for comparison.
New loan details, including your proposed rate, term, and any cash-out amount, define the loan you're considering.
Extra payments let you model paying more than the required amount on the new loan, either as a one-time or recurring addition.
People refinance to lower their rate and monthly payment, to shorten their loan term and pay off the home faster, to cash out equity for renovations or debt consolidation, or to move from an adjustable rate to a fixed one for payment stability.
Closing costs typically run 2% to 5% of the new loan amount, covering loan origination, appraisal, title search, and credit report fees. This is why your break-even point, how long it takes your monthly savings to cover those costs, matters more than the rate difference alone.
Most lenders require at least 20% equity, or an 80% loan-to-value ratio, to refinance. Some government-backed options, such as an FHA Streamline Refinance or a VA Interest Rate Reduction Refinance Loan, allow more flexible equity requirements.
The calculator lines up your current and proposed loans side by side across several measures: your new monthly payment versus your current one, total interest paid over the life of each loan, how your loan balance declines over time under each scenario, and a full amortization schedule for both. Looking at total interest paid, not just the monthly payment difference, matters most if your goal is long-term savings rather than short-term cash flow relief. If you're adding extra payments to the new loan, the calculator factors those in as well, showing how they shift your balance and interest costs compared to a standard payment schedule.
A fiduciary financial advisor can help you weigh a refinance against your other financial priorities and confirm whether the break-even math works in your favor. Matching with an advisor is free and comes with no pressure to commit.
100% free · No obligation · No cold calls
