Refinancing replaces your existing mortgage with a new loan, often at a lower rate or different term. This calculator compares your current and refinanced payments and estimates how much interest you could save. Closing costs, appraisal fees, and lender charges are not included.
How to use this calculator
- Enter your current remaining loan balance.
- Enter your current interest rate and remaining term.
- Enter the new interest rate and loan term you are considering.
- Review current vs new monthly payments and lifetime interest savings.
Formula
Current and new monthly payments are calculated using the amortization formula on their respective balances, rates, and terms. Monthly savings is the difference between payments. Lifetime interest savings compares total interest paid under each scenario.
Example
Refinancing a $250,000 balance from 7% with 25 years remaining to 5.5% over 30 years may lower the monthly payment by about $200 and save tens of thousands in interest, depending on closing costs.
Frequently asked questions
- When does refinancing make sense?
- Refinancing often makes sense when you can lower your rate by at least 0.5–1%, plan to stay in the home long enough to recoup closing costs, or need to change your loan term.
- Are closing costs included?
- No. Closing costs, appraisal fees, and lender charges are not included. Factor those in when deciding if refinancing is worthwhile.