Free mortgage refinance calculator — see how much you can save by refinancing your home loan
This free mortgage refinance calculator (also a cash out refinance calculator) helps you figure out exactly how much you can save by refinancing your home loan. With mortgage rates changing all the time, refinancing can save you thousands of dollars over the life of your loan.
Refinancing means replacing your current mortgage with a new one, usually at a lower interest rate. A cash-out refinance lets you borrow more than you owe and pocket the difference.
Refinancing usually makes sense when:
Refinancing isn't free — you'll pay closing costs of 2-5% of the loan amount. That's why it's important to calculate your break-even point: how many months it takes for your monthly savings to cover the closing costs.
A cash-out refinance lets you borrow against your home equity. For example, if your home is worth $400,000 and you owe $250,000, you could refinance to $300,000 and pocket $50,000 in cash. This is popular for debt consolidation, home improvements, or paying for college.
There are two main types of refinancing:
Just like original mortgages, refinances come in different flavors:
For the best rates, you'll want a credit score of at least 740. If your score is between 620-740, you can still refinance but you'll pay a slightly higher rate. Below 620, it's harder to get approved.
Closing costs typically range from 2-5% of the loan amount. On a $250,000 mortgage, that's $5,000-12,500. Some lenders offer "no closing cost" refinancing, but you'll pay a slightly higher interest rate — usually 0.25-0.5% more.
On a $250,000 mortgage, dropping from 6.5% to 5.5% saves about $160/month — that's $1,920 per year, or $48,000 over 25 years. Use this calculator with your exact numbers to see your savings.
Yes! Dropping your rate by 1% on a $250,000 loan saves you about $150-200 per month. If you'll stay in the home more than 2-3 years, it's almost always worth it. Just make sure the break-even point works for you.
Typical closing costs are 2-5% of the loan amount. On a $250,000 loan, that's $5,000-12,500. Some lenders offer "no closing cost" refinancing, but you pay a slightly higher interest rate. You can also roll closing costs into the loan (called "low-doc" or "no-closing-cost" refinance).
A cash-out refinance lets you borrow more than you owe on your mortgage and take the difference in cash. For example, if your home is worth $500k and you owe $300k, you could refinance to $375k and get $75k cash. It's popular for home improvements, debt consolidation, or paying off high-interest credit cards.
Typically 30-45 days. It's a lot like buying your home all over again — you'll need to provide pay stubs, tax returns, bank statements, and the lender will do an appraisal. FHA streamline and VA IRRRL can be faster, sometimes 2-3 weeks.
If you plan to move within 1-2 years, refinancing might not be worth it because you won't recoup the closing costs. Also, if your credit score dropped significantly since you got your original mortgage, you might not qualify for a better rate.
Yes, but you should still shop around! Different lenders offer different rates and fees. Even a 0.25% difference can save you tens of thousands of dollars over the life of the loan.