Mortgage Refinance Calculator
Compare your current mortgage against a new refinance offer. See your new monthly payment, break-even point, and total interest saved over the life of the loan.
In words: Two lakh eighty thousand
New payment: ₹1,679/mo
17 mo
≈ 1.4 years
₹34,498
vs. keeping current loan
Mortgage Refinance Calculator: Should You Refinance Your Home Loan?
If mortgage rates have dropped since you bought your home, or your credit score has gone up, refinancing can put real money back in your pocket every month. This free mortgage refinance calculator compares your current home loan against a new refinance offer side by side, so you can see your new monthly payment, how long it takes to break even on closing costs, and how much interest you save over the life of the loan.
Refinancing simply means replacing your existing mortgage with a new one, usually to get a lower interest rate, switch from an adjustable rate to a fixed rate, shorten your loan term, or pull out cash from your home's equity. But refinancing isn't free. Lenders charge closing costs, and it only makes sense if the savings you get outweigh what you pay to get the new loan. That's exactly what this refinance mortgage calculator is built to answer.
How This Refinance Calculator Works
Start by entering your current loan details: how much you still owe, your current interest rate, and how many years are left on your loan. Next, enter the details of the new loan you're being offered: the new interest rate, the new loan term, and the closing costs your lender is charging.
The calculator instantly works out your current monthly payment and your new monthly payment, then shows you the difference. It also runs a full year-by-year comparison of both loans so you can see exactly how the interest and remaining balance stack up over time, either as a chart or a downloadable table.
Understanding Your Break-Even Point
The break-even point is one of the most important numbers when you refinance a mortgage. It tells you how many months it takes for your monthly savings to cover the closing costs of the new loan. For example, if refinancing costs you $5,000 in closing costs and saves you $200 a month, your break-even point is 25 months, a little over two years.
As a simple rule of thumb, refinancing tends to make sense if you plan to stay in your home longer than your break-even point. If you're likely to sell or move before you break even, the closing costs may cost you more than you save, and it might be better to keep your current loan.
Lifetime Interest Savings: The Bigger Picture
A lower monthly payment feels great, but it doesn't always mean you're saving money in the long run, especially if you restart the clock on a brand-new 30-year term. This mortgage refinance calculator also compares the total interest left to pay on your current loan against the total interest you'd pay on the new loan across its full term.
This is why the calculator separates 'monthly savings' from 'lifetime interest savings.' A refinance can lower your monthly bill while still costing you more interest overall if the new term is much longer than the years you had left. Checking both numbers together gives you the full, honest picture before you sign anything.
Cash-Out Refinance and Rolling in Closing Costs
Under the advanced options, you can model a cash-out refinance, where you borrow more than your current payoff balance and pocket the difference in cash. This is a common way homeowners fund renovations, pay off higher-interest debt, or cover big expenses using their home's equity. Just remember that cash-out amounts increase your new loan balance, and therefore your new monthly payment and total interest.
You can also choose to roll your closing costs into the new loan instead of paying them upfront out of pocket. This means you won't need cash on hand at closing, but it slightly increases your loan balance and the interest you pay over time. Toggling this option in the calculator lets you compare both paths and pick whichever fits your budget.
Good Reasons to Refinance a Mortgage
The most common reason people refinance is to lock in a lower interest rate, which lowers both the monthly payment and the total interest paid. Others refinance to switch from an adjustable-rate mortgage to a fixed rate for more predictable payments, or to shorten a 30-year loan into a 15-year loan and pay off their home faster.
Some homeowners refinance to remove private mortgage insurance (PMI) once they've built up enough equity, while others use a cash-out refinance to consolidate high-interest credit card debt into one lower-rate payment. Whatever the reason, run the numbers through this calculator first so you know the real cost and real savings before you apply.
When Refinancing Might Not Be Worth It
Refinancing isn't always the right move. If you're planning to sell your home soon, the closing costs may not have time to pay for themselves before the break-even point. Similarly, if the difference between your current rate and the new rate is very small, the savings may not be worth the paperwork and fees.
It's also worth being careful with cash-out refinances. Pulling equity out of your home to pay for things that don't grow in value, like vacations or everyday spending, can leave you owing more on your house for longer. Use the advanced settings here to see the true long-term cost before you decide.
How to Use This Calculator Effectively
For the most accurate results, use the exact remaining balance from your latest mortgage statement, not your original loan amount. Use your current interest rate and the actual number of years left on your loan, not the original loan term. Then plug in the real rate, term, and closing costs quoted by your lender for the refinance offer.
Try adjusting the new loan term to see how it changes your numbers. Shorter terms usually mean higher monthly payments but much lower lifetime interest. Longer terms lower your monthly payment but can increase total interest paid, even at a lower rate. Comparing a few scenarios side by side is the best way to find the refinance that truly fits your goals.
What Affects the Interest Rate You're Offered
The rate a lender offers when you refinance depends on several things: your credit score, your debt-to-income ratio, how much equity you have in your home, the loan term you choose, and current market rates set largely by broader economic conditions. A higher credit score and lower debt-to-income ratio almost always unlock a better refinance rate.
Home equity matters too. Lenders usually offer their best rates when you have at least 20% equity in your property, since that lowers their risk. If your equity is below that threshold, you may still be able to refinance, but you might pay a slightly higher rate or need private mortgage insurance until you build up more equity.
Documents and Steps Involved in Refinancing
Once you decide refinancing makes sense, the process looks a lot like your original mortgage application. Lenders typically ask for recent pay stubs, tax returns, bank statements, and details about your current loan. They will also order a new home appraisal to confirm your property's current market value, which affects how much equity you have.
After you submit your documents, the lender underwrites the loan, and you'll usually get a Loan Estimate showing your new rate, monthly payment, and closing costs. Compare this Loan Estimate against the numbers from this calculator to double check that the deal still makes financial sense before you move to closing.
Rate Locks and Timing Your Refinance
Mortgage rates can move daily, so once you find an offer you like, most lenders let you 'lock' that rate for a set period, often 30 to 60 days, while your loan is processed. Locking in protects you from rate increases while the paperwork is finalized, though it also means you won't automatically benefit if rates drop further before closing.
Because rates change often, it's smart to rerun this refinance calculator whenever you get a new quote, rather than relying on numbers from a few months ago. Even a small change in interest rate can shift your monthly savings and break-even point enough to change your decision.
Refinancing to Remove PMI or Change Loan Type
If you originally put down less than 20% and are still paying private mortgage insurance, refinancing once your home's value has risen or your balance has dropped can help you eliminate that extra monthly cost. Rising home values in your area can sometimes push your equity above 20% faster than you'd expect from payments alone.
Refinancing is also commonly used to move between loan types, for example switching from an FHA loan with ongoing mortgage insurance premiums to a conventional loan, or moving from an adjustable-rate mortgage to a fixed rate before an upcoming rate adjustment. Run each scenario through the calculator above to see the real dollar impact of switching.
Frequently Asked Questions
What is a mortgage refinance calculator?
A mortgage refinance calculator compares your existing home loan against a new refinance offer. It shows your new monthly payment, the break-even point on closing costs, and how much interest you save (or lose) over the life of the loan.
What is a good break-even point for refinancing?
Generally, a break-even point under 2 to 3 years is considered good, since most homeowners stay in a property longer than that. If you plan to move before the break-even point, refinancing may not save you money.
Does refinancing restart my loan term?
Yes, by default a refinance replaces your loan with a brand-new term, such as another 30 years. That's why this calculator compares total lifetime interest, not just the monthly payment, so a longer new term doesn't hide a worse deal.
How much does it cost to refinance a mortgage?
Closing costs for a refinance typically range from about 2% to 5% of the loan amount, covering fees like appraisal, origination, title search, and recording charges. Enter your lender's exact quote into the calculator for an accurate result.
What is a cash-out refinance?
A cash-out refinance replaces your mortgage with a larger loan and gives you the difference in cash, based on the equity you've built in your home. It increases your loan balance and monthly payment, so it should be used carefully.
Is it better to refinance to a 15-year or 30-year loan?
A 15-year refinance usually has a lower interest rate and much lower lifetime interest cost, but a higher monthly payment. A 30-year refinance lowers your monthly payment but usually costs more in total interest. Compare both terms in the calculator to see which fits your budget.
Should I roll closing costs into my refinance loan?
Rolling closing costs into your new loan avoids paying cash upfront, but it increases your loan balance and the interest you pay over time. If you have the cash available, paying closing costs upfront usually saves you more money long term.
Will refinancing lower my monthly payment?
It depends on the new interest rate, loan term, and loan amount. A lower rate or a longer term can lower your monthly payment, while a shorter term or a cash-out amount can raise it, even if the rate is lower.
How accurate is this mortgage refinance calculator?
This calculator uses standard amortization formulas, the same math lenders use to calculate principal and interest. Your results will be accurate as long as you enter your real remaining balance, rate, and the exact terms quoted by your lender.
Can I use this calculator for an adjustable-rate to fixed-rate refinance?
Yes. Simply enter your current adjustable rate and remaining term as your 'current loan,' and enter the fixed rate and term being offered as your 'new loan' to compare the two side by side.