Mortgage Refinance Savings Calculator
Calculate your potential monthly savings, break-even point, and lifetime savings.
When Should You Refinance Your Mortgage?
Deciding to refinance is a major financial move. Generally, homeowners consider refinancing when interest rates have dropped by at least 0.75% to 1% below their current rate. However, the decision also depends on how long you plan to stay in the home and your specific financial goals.
Common reasons to refinance include lowering monthly payments, shortening the loan term to pay off debt faster, or tapping into home equity for renovations or debt consolidation.
Understanding Your Refinance Break-Even Point
Refinancing isn't free—it typically comes with closing costs ranging from 2% to 5% of the loan amount. Your break-even point is the amount of time it takes for your monthly savings to "pay back" these upfront costs.
If you plan to move before reaching your break-even point, refinancing might not save you money.
Refinance Savings Checklist
Lower Your Rate
The primary goal for most is to secure a lower interest rate, reducing the total interest paid over the life of the loan.
Change Loan Term
Switching from a 30-year to a 15-year mortgage can save you six figures in interest, though it increases monthly payments.
Simplify Your Debt
Refinancing can be an opportunity to consolidate a second mortgage or HELOC into one single loan with a better rate.