When does refinancing make sense?

Refinancing makes sense when: (1) you can lower your rate by at least 0.5-1%, (2) you plan to stay in the home past the break-even point, and (3) closing costs are reasonable (typically 2-5% of loan amount). The break-even point is when cumulative monthly savings equal the closing costs paid upfront.

How do I calculate my break-even point on a refinance?

Break-even months = total closing costs divided by monthly payment savings. Example: $5,000 closing costs and $200/month savings = 25-month break-even. If you plan to stay in the home more than 25 months, refinancing saves money overall.

What are typical refinance closing costs?

Refinance closing costs typically run 2-5% of the loan amount, or roughly $3,000-$6,000 on a $200,000 loan. Common costs: origination fee (0.5-1%), appraisal ($300-600), title insurance ($500-1,500), recording fees ($25-250), and prepaid interest.

Should I refinance to a 15-year or 30-year mortgage?

A 15-year refinance has higher monthly payments but dramatically less total interest. A 30-year refinance lowers your monthly payment most. Best approach: refinance to a 30-year but pay extra principal monthly — you get payment flexibility without being locked into high payments.

Free Mortgage Refinance Calculator 2026

Find out if refinancing your mortgage saves money.
See monthly savings, break-even point, and total interest saved over the loan life.

Break-even analysis · Lifetime savings · Rate comparison

Current Loan

Current Loan Balance *

Remaining principal. Check your latest mortgage statement.

Current Interest Rate

Remaining Term

New Loan

New Interest Rate *

30-yr fixed avg (Sep 2026): ~6.8%. Shop at least 3 lenders.

New Loan Term

Estimated Closing Costs

Typical range: $2,000–$6,000. Includes origination, appraisal, and title fees.

Should You Refinance Your Mortgage? (2026 Guide)

The refinance decision comes down to one question: will you stay in the home long enough to recoup the closing costs through monthly savings?

The Break-Even Rule

If closing costs = $5,000 and monthly savings = $200, your break-even is 25 months (about 2 years). If you plan to stay longer, refinancing saves money. If you might sell or move in 2 years, the math does not work.

The 1% Rule of Thumb

Refinancing is generally worth it if you can lower your rate by at least 1 percentage point. A 0.5% drop can still make sense if your loan balance is large enough that the monthly savings justify the closing costs quickly.

Cash-Out vs. Rate-and-Term Refinance

A rate-and-term refinance (what this calculator covers) just changes your rate and/or term. A cash-out refinance lets you borrow against your equity but increases your balance and usually your rate. Use cash-out carefully — it resets your payoff timeline.

FAQ

Refinance questions answered

How much does it cost to refinance a mortgage?

Refinance closing costs typically run 2–5% of the loan amount. On a $280,000 loan that is $5,600–$14,000. Some lenders offer "no-closing-cost" refinances where fees are rolled into the rate (slightly higher rate) or loan balance. Always compare total cost over your planned stay, not just the rate.

How many times can I refinance my mortgage?

There is no legal limit on refinancing frequency. However, each refinance resets your amortization (more of early payments go to interest again), incurs closing costs, and may require a new appraisal and credit check. Most lenders require 6–12 months between refinances.

What credit score do I need to refinance?

Conventional refinance: 620+ minimum, 740+ for best rates. FHA streamline refinance: no minimum score. VA IRRRL: no minimum. The higher your score, the lower your rate. Even improving from 680 to 720 can save 0.25–0.5% on the rate.

Is a 15-year refinance worth it?

A 15-year refinance saves massive interest over the loan life but has significantly higher monthly payments. On a $280,000 refinance: 30-yr at 6.5% = $1,770/mo. 15-yr at 6.0% = $2,364/mo (+$594/mo). Total interest: 30-yr = $357,000 vs 15-yr = $145,000. You save $212,000 in interest if you can afford the higher payment.