Mortgage Refinance Calculator
Mortgage-specific refinance analysis with closing costs, PMI changes, break-even timeline, and total cost comparison over the life of the loan.
CURRENT MORTGAGE
NEW MORTGAGE
β Save $102,637 by refinancing
CURRENT
$2,098/mo
NEW
$1,799/mo
Monthly savings: $299 | Break-even: 17 months
π How Mortgage Refinance is Calculated
Current mortgage details
$300K at 7.5%, 25 years remaining= $2,218/month P&I
New loan terms
$300K at 6.0%, 25 years= $1,933/month P&I
Monthly savings
$2,218 β $1,933= $285 saved per month
Break-even analysis
$8,000 closing costs Γ· $285= 28 months to recoup costs
Rate Comparison
Rate-and-Term
Most Popular
Same balance | Lower rate/shorter term | 2-5% costs
Cash-Out
Access Equity
Larger loan | Receive cash | Need 20% equity
FHA Streamline
Easiest
No appraisal | Reduced docs | FHA-to-FHA only
FHA-to-Conventional: The Hidden PMI Savings
π‘ Should You Refinance Your Mortgage?
4 Types of Mortgage Refinancing
Understanding the different refinance types helps you choose the right approach:
- Rate-and-Term Refinance β The most common type. You change the interest rate and/or loan length while keeping the same balance. Ideal when rates drop or your credit improves
- Cash-Out Refinance β Replace your mortgage with a larger loan and receive the difference as cash. Requires at least 20% remaining equity. Common uses: home improvements, paying off high-interest debt, emergency expenses. Rates are typically 0.125-0.25% higher than rate-and-term
- FHA Streamline Refinance β Available only to existing FHA loan holders. Simplified process with no appraisal required, reduced documentation, and the benefit of net tangible cost must be met. Ideal for FHA borrowers who want a lower rate without the hassle of a full refinance
- ARM-to-Fixed Refinance β Converts an adjustable-rate mortgage to a fixed rate before the ARM adjustment period begins. Provides payment certainty and protection from rising rates. Most valuable when you plan to stay in the home long-term
Mortgage Refinance Closing Costs Breakdown
Refinancing a mortgage involves several fees, typically totaling 2-5% of the loan amount:
| Fee | Typical Cost | Notes |
|---|---|---|
| Loan Origination | 0.5-1.5% of loan | Lender's processing fee; sometimes negotiable |
| Home Appraisal | $300-$600 | Required to confirm current home value |
| Title Search | $200-$400 | Verifies clear title and no liens |
| Title Insurance | $500-$2,000 | Protects lender against title issues |
| Recording Fee | $50-$250 | County charge for deed paperwork |
| Application Fee | $250-$500 | Non-refundable processing charge |
| Document Preparation | $200-$500 | Legal paperwork and disclosures |
| Inspection/Survey | $300-$600 | Property condition and boundary verification |
Some lenders offer "no-closing-cost" refinances where costs are either rolled into the loan balance or offset by a slightly higher interest rate. This can make sense if you plan to sell within 5-7 years.
Removing PMI Through Refinancing
If your home has appreciated or you've paid down your balance enough to reach 20% equity, refinancing can eliminate PMI/MIP entirely:
- Conventional PMI: Automatically drops at 78% LTV, but refinancing can remove it at 80% LTV sooner
- FHA MIP: Required for the life of the loan (for loans with less than 10% down). The ONLY way to remove it is refinancing to a conventional loan
- Savings: PMI typically costs 0.3-1.5% of loan annually. On a $250K loan, that's $62-$312/month
Common Refinancing Mistakes
- Ignoring the break-even point β Refinancing costs money upfront. If you move before break-even, you lose
- Extending the term β A new 30-year mortgage resets your clock. Refinance to your remaining term length instead
- Focusing only on rate β A 0.5% lower rate with $10,000 in fees may not save as much as a 0.375% drop with $3,000 in fees
- Cash-out for depreciating assets β Using home equity for vacations or cars turns short-term spending into 30-year debt
- Not shopping multiple lenders β Rates and fees vary significantly. Get quotes from at least 3-4 lenders within a 14-day window (counts as one credit inquiry)