Precision Utility
Mortgage Refinance
Calculator
Updated
2025
Terms
15–30 yr
Should you refinance your mortgage? Enter your current loan details and the new rate you've been offered to see your potential monthly savings, break-even point, and total interest saved over the life of the loan.
Current Mortgage
New Loan Details
New Monthly Payment
$0
Monthly Savings
$0
Break-Even
0 mo
Total Interest Saved
$0
Lifetime Savings
$0
How the refinance calculator works
Enter your current loan balance, interest rate, and monthly payment, then provide the new interest rate, loan term, and estimated closing costs. The calculator computes your new monthly payment using standard amortization and compares it to your current payment.
Your monthly savings are the difference between your current and new payment. The break-even point tells you how many months of savings it takes to recoup your closing costs. Total interest saved compares the interest you'd pay over the remaining life of both loans.
Lifetime savings factor in the closing costs, giving you the true net benefit of refinancing over the full loan term.
When does refinancing make sense?
The traditional guideline is to refinance when you can reduce your rate by at least 1 percentage point. But the real answer depends on your break-even period and how long you plan to stay in your home.
If your break-even point is 24 months and you plan to live in the home for another 10 years, refinancing is a clear win. If you're planning to move within two years, it probably isn't worth the closing costs.
Other good reasons to refinance include switching from an adjustable-rate mortgage (ARM) to a fixed rate, eliminating private mortgage insurance (PMI), or shortening your loan term to build equity faster.
Understanding closing costs
Closing costs on a refinance typically range from 2% to 5% of the loan amount. Common fees include the appraisal ($300–$600), title search and insurance ($700–$900), loan origination fee (0.5%–1% of the loan), and recording fees.
Some lenders offer "no-closing-cost" refinances, but these usually come with a slightly higher interest rate. You'll pay less upfront but more over time. Use this calculator with both scenarios to see which option saves you more.
Tips for getting the best refinance rate
Improve your credit score before applying — even a 20-point increase can lower your rate. Pay down credit card balances and avoid opening new accounts in the months before you apply.
Shop multiple lenders. Rates can vary significantly, and getting quotes from at least three lenders can save you thousands. All mortgage inquiries within a 14-day window count as a single hard pull on your credit.
Consider paying points (prepaid interest) to buy down your rate if you plan to stay in the home long-term. One discount point typically costs 1% of the loan amount and reduces your rate by about 0.25%.
Frequently asked questions
When should I refinance my mortgage?
A common rule of thumb is to refinance when you can lower your rate by at least 1 percentage point. The true test is your break-even point — if you'll stay in the home longer than it takes to recoup closing costs, refinancing likely makes financial sense.
What are typical closing costs for a refinance?
Closing costs typically range from 2% to 5% of the loan amount. On a $300,000 mortgage, expect to pay $6,000 to $15,000 in fees including appraisal, title insurance, origination, and recording fees.
What is a cash-out refinance?
A cash-out refinance replaces your current mortgage with a larger one, and you pocket the difference. It's a way to tap into your home equity for renovations, debt consolidation, or other expenses. Rates are usually slightly higher than a standard rate-and-term refinance.
Does refinancing hurt your credit score?
Refinancing causes a small, temporary dip in your credit score (usually 5 to 10 points) due to the hard inquiry and new account. The impact fades within a few months, and consistent payments on the new loan can actually boost your score over time.
How long does it take to break even on a refinance?
Divide your closing costs by your monthly savings. For example, $5,000 in costs divided by $200 in monthly savings equals a 25-month break-even. Stay in the home longer than that and the refinance is a net positive.
Can I refinance with bad credit?
Yes, though options are more limited. Conventional refinances usually need a 620+ credit score. FHA streamline refinances may accept scores as low as 580. Improving your score before applying can save you thousands in interest over the loan term.