Why Refinance Your Mortgage?
Refinancing involves replacing your existing home loan with a new one, typically to secure a lower interest rate, shorten the loan term, or tap into equity. Use our 2026 Refinance Calculator to see if the math works in your favor.
Key Considerations
- Closing Costs: Processing fees, appraisal, and title insurance can cost 2-5% of the loan amount.
- Loan Term: Resetting to a new 30-year term might lower payments but increase total interest paid. Consider a 15-year term for faster payoff.
How to use?
- Enter Current Loan: Your outstanding balance, current rate, and monthly payment.
- Enter New Loan: The rate you qualify for today and estimated closing costs.
- Analyze: Check the "Break-Even Months" to see how long until you are actually saving money.
Frequently Asked Questions
When is the right time to refinance?
Generally, if you can lower your interest rate by at least 0.75% to 1%, it makes mathematical sense. Also consider your 'Break-Even Point'.
What is the Break-Even Point?
It is the time it takes for your monthly savings to cover the closing costs of the new loan. If you plan to move before this date, refinancing loses you money.
Cash-Out Refinance vs Rate-and-Term?
Cash-Out lets you tap into home equity for cash (higher rates usually). Rate-and-Term simply changes your interest rate or loan duration (lower rates).
Disclaimer: This tool is for educational purposes only and does not constitute professional financial advice. Results are estimates based on the information provided. Please consult a qualified financial advisor before making important financial decisions.