Mortgage Refinance Calculator: Should I Refinance?
Determine if refinancing can help you achieve your financial goals — whether it reduces your overall loan cost or gets you a more favorable monthly payment.
Current loan
- Pay $0.00 more each month
- Spend $0.00 more over the lifetime of the loan
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Using NerdWallet's Mortgage Refinance Calculator
👉 Did you buy a home in the last two years? Refinancing might save you money. Mortgage rates are down a percentage point compared to last year, and may drop more after the Fed rate cut on Sept. 18, 2024.
If you're thinking of refinancing your mortgage, it's probably because you want to save money. There are two ways to save money by refinancing:
Reducing your monthly payment.
Paying less interest over time.
If you time it right, you may be able to accomplish both — but that's less likely. In most cases, you'll be able to do one and not the other:
Pay more every month but pay less interest over time.
Pay less every month but pay more interest over time.
On the flip side: A refinance could result in a higher monthly payment and more interest over time, depending on your interest rate and the length of the loan.
The results of this calculator explain which of the above categories your refinance would fit into.
How to use this mortgage refinance calculator
Before you begin, you’ll need some information about your current mortgage. It’s OK to estimate, but the results will be more accurate with real numbers. You can find them on a recent mortgage statement or by calling your mortgage lender.
Start by entering details about your current loan. You can reference your remaining loan balance or the details of your original loan; here's what you'll need for each:
Remaining loan balance
Total balance remaining
Monthly payment
Interest rate
Original loan details
Original loan amount
Original loan term, in years
Remaining term, in years and months
Interest rate
Then, enter information about your new loan. Here’s what to consider:
Loan term: Refinancing to a shorter term helps you pay off the loan faster and pay less interest along the way. However, depending on your new interest rate, your monthly payments may go up. You can also refinance to the same number of years you have remaining on your current loan.
Interest rate: See current mortgage refinance rates, or use our default for today’s average rate.
Points: For an optional upfront cost, you can pay to reduce your interest rate over time. Learn when it’s worth it to pay for mortgage discount points.
Fees: Just like a purchase mortgage, you’ll pay closing costs. Closing costs typically run 2%-6% of the loan amount.
Cash out amount: You can also tap into home equity by getting a new, larger loan. Learn if a cash-out refinance is right for you.
How to interpret your results
Your results will show a side-by-side comparison between your current loan and your new one. Up top, you’ll see three key details:
Monthly payment: How much more (or less) you’ll pay in principal and interest each month.
Lifetime of the loan: How much you’ll save (or spend) over the lifetime of the loan, based on your new interest rate.
Breakeven period: How long it’ll take for savings to balance out your upfront costs, known as the refinance break-even point. If you sell the house before this point, you won't recoup the cost of your refinance.
Learn more about the refinance process
Once you’ve decided that refinancing makes sense for you, read more about how to refinance your mortgage.
Still shopping around for a low interest rate? See the Nerds’ picks for best mortgage refinance lenders.
Finally, learn about the hidden fees to watch out for in closing costs when refinancing your loan.
