Mortgage Refinance Calculator
Compare your current mortgage with a refinanced loan. Estimate new monthly payments, total interest savings, break-even point with amortization schedules and charts.
Current Mortgage
New Mortgage (Refinance)
About This Calculator
A mortgage refinance replaces your existing home loan with a new one, typically to secure a lower interest rate, reduce monthly payments, or shorten the loan term. Our Mortgage Refinance Calculator helps you compare your current mortgage against proposed refinancing terms side by side, so you can make an informed financial decision.
The calculator uses standard amortization formulas to compute monthly payments for both loans. It compares total interest costs over the life of each loan, calculates your monthly savings, and determines the break-even point -- the number of months until your cumulative savings exceed the closing costs of refinancing. The amortization chart shows how the outstanding balance declines over time for both the current and refinanced loan.
Regional Notes
India: Home loan refinancing typically involves switching from one lender to another for better rates. Processing fees range from 0.5% to 1% of the loan amount. The RBI repo rate (currently 5.25%) influences mortgage rates. Consider prepayment penalties if refinancing within the first few years.
US: Conventional, FHA, VA, and USDA refinance options are available. Closing costs average 2-5% of the loan amount. Mortgage points can lower your rate. The 30-year fixed-rate mortgage is the most common refinance product. Private mortgage insurance (PMI) may apply if equity is below 20%.
UK: Remortgaging is the common term for refinancing. Fixed-rate, tracker, and discount rate mortgages are available. Arrangement fees typically range from £500 to £2,000. Early repayment charges (ERCs) may apply if leaving a fixed-rate deal early. The Bank of England base rate influences mortgage pricing.
Frequently Asked Questions
What does it mean to refinance a mortgage?
Refinancing a mortgage means replacing your existing home loan with a new one, typically with a lower interest rate, different term, or both. The new loan pays off the original mortgage, and you continue making payments under the new terms. Homeowners refinance to reduce monthly payments, shorten the loan term, or access home equity through cash-out refinancing.
Is refinancing a mortgage worth it?
Refinancing is worth it when the savings from lower monthly payments or reduced total interest exceed the closing costs. A common rule of thumb is to refinance if you can lower your interest rate by at least 1%. The break-even point -- when cumulative savings surpass closing costs -- typically ranges from 2 to 5 years. If you plan to stay in your home beyond the break-even period, refinancing is usually beneficial.
How much does it cost to refinance a mortgage?
The average closing cost to refinance a mortgage in the US is approximately $4,345, though this varies by loan amount, property location, and lender. In India, refinancing costs typically include processing fees (0.5-1% of loan amount), legal fees, and prepayment penalties. UK borrowers may face arrangement fees (£500-£2,000), valuation fees, and early repayment charges. Always compare total costs against projected savings.
What is a break-even point in mortgage refinancing?
The break-even point is when the cumulative savings from your lower monthly payment equal the total closing costs paid to refinance. For example, if closing costs are $5,000 and you save $200 per month, your break-even point is 25 months. If you plan to stay in your home beyond this point, refinancing makes financial sense.
What is the minimum credit score to refinance a mortgage?
Conventional mortgage refinancing in the US typically requires a minimum credit score of 620. FHA streamline refinancing may accept scores as low as 580, while VA refinancing has no official minimum but lenders prefer 620+. In India, CIBIL scores of 750+ generally qualify for the best refinance rates. UK lenders typically require a credit score of 700+ for competitive rates.
What documents are needed to refinance a mortgage?
Standard documents include proof of income (pay stubs, tax returns, bank statements), identification, current mortgage statement, property insurance, and appraisal reports. Self-employed borrowers may need additional business financials. Lenders review debt-to-income ratio, employment history, and credit report during the underwriting process.
Can I refinance with the same lender?
Yes, you can refinance with your current lender, often through a streamlined process that may reduce paperwork and closing costs. Some lenders offer rate modification programs without a full refinance. However, it is wise to shop around with multiple lenders as another institution may offer better rates or terms, potentially saving you more money.
How long does it take to refinance a house?
A typical mortgage refinance takes 30 to 45 days from application to closing. The timeline depends on the lender's processing speed, property appraisal scheduling, document verification, and underwriting. Streamlined refinance programs (like FHA Streamline or VA IRRRL) can close in as little as 2-3 weeks if documentation is clean.