- This is calculated by dividing your upfront refinance costs (estimated closing costs) by your estimated monthly savings
Mortgage Refinance Calculator
See how refinancing could change your mortgage
Use Lock It Mortgage's refinance calculator to see if refinancing may make sense for your goals. Compare your current mortgage with a potential new loan and see how a refinance could affect your monthly payment, interest rate, loan term, mortgage insurance, and overall costs.
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Closing costs can often be rolled into your new loan, which increases the amount you borrow.
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Typically, at least 20% equity must remain in the home after a cash-out refinance.
You could reduce your monthly payment by an estimated
$425
/month
- The estimated payment change is based on principal, interest, and mortgage insurance included in the calculator. It does not include property-related expenses such as HOA dues, property taxes, or homeowners insurance.
- Your actual savings may vary based on your credit profile, property type, occupancy, loan-to-value ratio, and other factors.
By refinancing your existing loan, your total finance charges may be higher over the life of the loan.
New Monthly Payment
This is your estimated monthly payment for the new loan, including
principal, interest, and mortgage insurance entered in the calculator.
Property-related costs such as property taxes, homeowners insurance, and HOA
dues are not included, and are not counted as refinance savings.
$2,124
Estimated Annual Savings
This calculator's annual estimate adds the reduction in total payments
over the first 12 months to the reduction in interest paid over those
months.
Mortgage insurance is included once in the payment difference.
This combined metric is not the same as cash saved during the year;
interest is already included in mortgage payments.
$9,365
Estimated Lifetime Savings
This is an estimate of how much you could save over the life of the new
loan, based on the costs and terms of your current and new loans. A lower
monthly payment may be due to a lower interest rate, a longer loan term, or
both. This estimate compares both loans through their respective payoff
dates. Entered monthly mortgage insurance is assumed constant until payoff.
Closing costs are counted once, and cash received is offset against the
added principal.
-$6.8K
Break-Even Point
- Your break-even point is the estimated amount of time it takes for your monthly savings to make up for the upfront costs of refinancing.
- If you keep your new mortgage beyond the break-even point, your monthly savings may begin to outweigh the upfront costs of refinancing.
1.4 Years
The new loan does not generate enough estimated savings to recover the upfront refinance costs.
How is the break-even point calculated?
* Scroll right to view the full table >
| Current Loan | New Loan | |
|---|---|---|
| Mortgage Balance | $— | $— |
| Interest Rate | —% | —% |
| Loan Term | — | — |
| Monthly Mortgage Payment (P&I) | $— | $— |
| Monthly Mortgage Insurance | $— | $— |
| Total Monthly Payment | $— | $— |
| Closing Costs | — | $— |
| Total Payments (P&I + MI) Over 8 Years | $— | $— |
| Principal Paid Over 8 Years | $— | $— |
| Interest Paid Over 8 Years | $— | $— |
| Remaining Loan Balance After 8 Years | $— | $— |
What You Could Save Over 8 Years:
This comparison considers your monthly payment, including mortgage insurance if
applicable,
refinance costs, total payments, principal and interest paid, and remaining loan
balance
over the selected period.
What Is Mortgage Refinancing?
Mortgage refinancing means replacing your existing mortgage with a new home loan. The new loan is used to pay off your current mortgage, and you begin making payments on the new loan.
Homeowners may consider refinancing for different reasons, including:
- Lowering their interest rate
- Reducing their monthly mortgage payment
- Paying off their mortgage sooner
- Removing mortgage insurance when eligible
- Changing their loan term
- Changing their loan program
- Accessing home equity through a cash-out refinance
- Removing a borrower from the existing mortgage, when permitted
Not every refinance is designed to lower the monthly payment. The right comparison depends on your goals, current loan, new loan terms, refinance costs, and how long you expect to keep the new mortgage.
How to Use Our Mortgage Refinance Calculator
Our refinance calculator helps you compare your current mortgage with a potential new loan.
01
Enter Your Current Mortgage Information
Start by entering information about your existing mortgage, including:
- Estimated current property value
- Remaining loan balance
- Remaining loan term
- Current interest rate
- Current monthly mortgage insurance, if applicable
For your property value, use an estimate of what your home may be worth today rather than the price you originally paid.
02
Enter Your New Loan Information
Next, enter the terms you're considering for your potential new mortgage, including:
- Estimated interest rate
- New loan term
- Estimated refinance costs
- Cash-out amount, if applicable
The calculator uses these figures to estimate the new mortgage payment and other results.
If you're considering a cash-out refinance, the calculator also factors the requested cash-out amount into the potential new loan.
03
Enter How Long You Plan to Keep the Mortgage
Enter the number of years you expect to keep your current or new mortgage. This helps the calculator compare the current loan and potential new loan over the period you select, rather than only looking at the monthly payment.
04
Compare Your Results
The calculator gives you two ways to look at your refinance:
Compare Your Loans Side by Side
Use the Loan Comparison tab to compare your current mortgage with the potential new loan. The comparison includes information such as:
- Mortgage balance
- Interest rate
- Loan term
- Monthly principal and interest
- Monthly mortgage insurance
- Total monthly payment
- Closing costs
- Total payments over your selected period
- Principal paid over your selected period
- Interest paid over your selected period
- Remaining loan balance at the end of your selected period
See the Estimated Difference Over Time
Based on the number of years you entered, the calculator compares the estimated cost of keeping your current loan with refinancing into the potential new loan.
Depending on the results, you may see:
- Potential Savings — when the potential new loan is estimated to cost less over your selected period.
- Potential Additional Cost — when the potential new loan is estimated to cost more over your selected period.
This comparison considers your monthly payment, including mortgage insurance if applicable, refinance costs, total payments, principal and interest paid, and remaining loan balance over the selected period.
Results are estimates based on th e information you provide and may differ from actual loan terms, costs, payments, and future loan balances.
When Might Homeowners Consider Refinancing?
Homeowners may consider refinancing when their current mortgage no longer fits their needs or when they want to explore different loan terms.
Changing the Interest Rate
A homeowner may explore refinancing when a different interest rate is available and wants to compare how the change could affect the mortgage.
Changing the Loan Term
Some homeowners refinance into a shorter loan term to change how quickly the mortgage is paid
off.
Others may consider a longer term when comparing different monthly payment options.
Changing the Monthly Payment
A refinance may change the required monthly mortgage payment.
The new payment can be affected by the interest rate, loan amount, loan term, mortgage
insurance, and other terms of the new mortgage.
Removing Mortgage Insurance
Depending on the loan program, property value, equity, and other requirements, refinancing may change or remove mortgage insurance.
Changing Loan Programs
Homeowners may explore refinancing when they want to consider a different type of mortgage or loan program.
Accessing Home Equity
A cash-out refinance may allow a homeowner to access some of the equity in their property, subject to applicable loan requirements.
Removing a Borrower
In some situations, refinancing may be used to remove a borrower from an existing mortgage, when permitted by the new loan program and lender requirements.
What Costs Are Involved When Refinancing?
Refinancing involves costs that can come from different parties. Some fees are charged by the lender, while others are charged by third parties or government agencies.
Understanding these different types of costs can help you shop your mortgage among lenders, compare the costs and terms they offer, and identify which fees you may be able to shop for.
Lender-Controlled Fees
Some refinance costs are charged directly by the lender. These may include:
- Origination charges
- Underwriting fees
- Processing or administrative fees
- Discount points
- Lender credits
These are generally lender-controlled charges and are among the costs you can compare when shopping for a mortgage.
Lenders may structure these charges differently, so it's important to look at the overall loan terms and costs rather than focusing on a single fee.
Third-Party Fees
Other costs are charged by companies or professionals outside of the lender. Depending on the transaction, these may include:
- Credit report fees
- Home appraisal fees
- Title search or title report
- Title insurance
- Attorney or title company fees
- Escrow fees
- Flood certification
- Survey fees, if required
- Final inspection fees, if required
These services are generally provided or priced by outside vendors rather than the lender. Some third-party services may be services you can shop for, while others may be selected or required as part of the loan process.
Government, Property-Related, and Prepaid Costs
Some costs are associated with government agencies, the property, or prepaid expenses rather than lender charges. These may include:
- Transfer taxes, if applicable
- Recording fees
- Other property-related or government charges
- Prepaid interest
- Property taxes
- Homeowners insurance
- Tax certificates
The lender generally does not determine these prices. For example, recording fees are established by the applicable government agency.
When Are These Costs Determined?
Not all refinance costs are known or finalized at the beginning of the loan process. Some third-party, government, and property-related costs may be determined or updated as the loan progresses.
The applicable fees and amounts can depend on the property, loan program, services required, and the terms of your loan or transaction.
Understanding these different costs can help you shop your mortgage among lenders and better understand which costs you may be able to compare or shop for.
Why Refinance Costs Matter
A refinance can involve upfront costs, so it's important to consider those costs when comparing your current mortgage with a potential new loan.
One way homeowners may evaluate this is by looking at the break-even point — the estimated amount of time it may take for monthly payment savings to make up for the upfront costs of refinancing.
For example:
If your estimated refinance costs are $9,000 and your estimated monthly savings are $250, the estimated break-even point would be approximately 36 months, or 3 years.
A longer break-even period may mean you need to keep the new mortgage longer for the monthly payment savings to make up for the upfront refinance costs. A lower monthly payment also does not necessarily mean you will pay less over the life of the loan. A longer loan term can result in more years of payments and potentially more total interest.
Frequently Asked Questions
What does a mortgage refinance calculator do?
A mortgage refinance calculator helps you compare your current mortgage with a potential new loan. It can estimate changes to your monthly mortgage payment, refinance costs, potential savings, break-even point, and loan payoff timeline based on the information you enter.
The results are estimates and may differ from the actual terms and costs of a refinance.
How does a refinance calculator determine my new monthly payment?
The calculator uses the estimated new loan amount, interest rate, loan term, and mortgage insurance, if applicable, to estimate your new monthly mortgage payment.
Property taxes, homeowners insurance, and HOA dues are not included in the mortgage payment calculated by this calculator.
Does a lower monthly payment mean I will save money?
Not necessarily. A lower monthly payment can result from a lower interest rate, a longer loan term, a lower loan balance, changes in mortgage insurance, or a combination of factors.
Refinancing also involves costs, so it's important to consider the new loan's terms and costs and how long you expect to keep the new mortgage.
What is the break-even point when refinancing?
The break-even point is the estimated amount of time it takes for your monthly savings to make up for the upfront costs of refinancing.
For example, if your estimated refinance costs are $6,000 and your estimated monthly savings are $200, the estimated break-even point would be 30 months, or 2.5 years.
If your new monthly payment is higher than your current payment, there is no break-even point based on monthly payment savings.
Why does the calculator show no break-even point?
The calculator may show no break-even point when your new monthly payment does not create enough savings to recover the upfront refinance costs.
For example, if your new monthly payment is higher than your current payment, there are no monthly payment savings to offset those costs.
Can refinancing lower my payment even if my interest rate does not decrease?
Yes. Your monthly payment can change for reasons other than the interest rate.
For example, refinancing into a different loan term, changing the loan amount, or removing mortgage insurance when eligible can affect your estimated payment.
What happens if I refinance into a longer loan term?
A longer loan term may result in a lower required monthly principal and interest payment, but you may make mortgage payments for more years.
This can also result in paying more total interest over the life of the loan, depending on the loan amount and interest rate.
What happens if I refinance into a shorter loan term?
A shorter loan term generally means the mortgage is scheduled to be paid off sooner. Your required monthly payment may be higher, but you may pay less interest over the life of the loan, depending on the new loan terms.
Use the calculator to compare the estimated payment and overall loan costs under different loan terms.
Can I refinance if my new payment is higher than my current payment?
Yes. A refinance does not have to result in a lower monthly payment.
You may consider refinancing for other reasons, such as changing your loan term, changing loan programs, removing mortgage insurance when eligible, or accessing home equity through a cash-out refinance.
What if I refinance but keep making my current monthly payment?
If your new monthly payment is lower, you may choose to continue making your current monthly payment. The additional amount could be applied toward your new loan's principal, which may help you pay off the loan sooner and reduce the interest you pay over time.
Want to see how additional payments could affect your mortgage? Use our Mortgage Payment Calculator to enter an additional payment amount and see how it could affect your payoff timeline, interest, and overall loan cost.
What closing costs are included in a refinance?
Refinance costs can include lender charges, third-party services, government fees, prepaid expenses, and other costs associated with the new loan.
The specific costs and amounts can vary based on the lender, loan program, property, and transaction. Some costs may also be determined or updated as the loan progresses.
Can I roll my refinance closing costs into the new loan?
Depending on the loan program and your qualifications, you may be able to finance some or all of your eligible closing costs instead of paying them upfront.
Financing the costs increases your new loan amount, which can affect your monthly payment, interest costs, and available equity.
Some lenders may also offer lender credits to offset certain closing costs, which can involve a higher interest rate.
Can I get cash out when I refinance?
Yes. A cash-out refinance replaces your existing mortgage with a new loan that may be larger than your current mortgage balance, allowing you to access some of your available home equity as cash, subject to the loan program and lender requirements.
The amount available depends on factors such as your home's value, existing mortgage balance, loan program, LTV limits, and borrower qualifications.
How much equity do I need for a cash-out refinance?
The amount of equity required depends on the loan program and your eligibility.
This calculator generally assumes an 80% loan-to-value (LTV) limit for cash-out refinances, meaning you typically need to retain at least 20% equity in your home. LTV limits vary by loan program and borrower eligibility.
VA cash-out refinances may allow a higher LTV, potentially up to 100% of the home's VA reasonable value, subject to VA and lender requirements.
How accurate are the results from a mortgage refinance calculator?
The calculator provides estimates based on the information and assumptions you enter.
Actual interest rates, loan amounts, closing costs, mortgage insurance, property value, and other loan terms may differ. Your final refinance terms are determined after reviewing your application, financial information, property, loan program, and applicable lender requirements.
What should I compare when shopping for a refinance?
Don't compare lenders based on the interest rate alone. Consider the interest rate, loan term, lender charges, lender credits, other loan costs, monthly payment, and the overall cost of the loan.
When comparing Loan Estimates, pay particular attention to costs that vary by lender, such as origination charges and lender credits. Comparing multiple Loan Estimates can help you understand how different lenders structure their loan offers.
Disclaimer: This refinance calculator is for educational and estimating purposes only and does not constitute a commitment to lend or guarantee of loan approval. Results are based on the information you provide and estimated rates and other assumptions, which are subject to change without notice. Actual loan approval and refinance terms depend on borrower qualification, credit approval, property valuation, loan program, lender guidelines, and other factors. Program parameters, terms, and conditions apply. Contact a Lock It Mortgage advisor to confirm current rates, program availability, and eligibility requirements.
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