Omni Calculator logo

Mortgage Refinance Calculator

Created by Tibor Pál, PhD candidate
Reviewed by Dominik Czernia, PhD and Jack Bowater
Last updated: Jan 18, 2024

"Should I refinance my mortgage now?" or "How much can I save if I refinance my house?"- if you would like a quick answer to these questions, the mortgage refinance calculator (or home refinance calculator) can give you excellent support. It does so by estimating the cost to refinance a mortgage and providing a simple platform to make a comparison between your current mortgage and the new refi home loan.

Furthermore, in the article below, you can find out how to apply the mortgage refinance calculator and read practical details about home loan refinance. For example, we explain how to refinance a house, why do people refinance their homes, and when to refinance a mortgage.

Why refinance a mortgage?

There can be different reasons for refinance a mortgage, but the three most common motives are the following:

  1. Lowering the monthly payments - You may pay a lower monthly repayment through a lower interest rate or by extending the mortgage term.

  2. Term reduction - When you shorten the loan term, your monthly payment might rise, but the overall interest charges will be lower.

  3. Obtain cash - With a cash-out refinance, you obtain a larger new loan than your original loan's balance, so you end up with extra cash coming from the difference. You can use the received cash for debt consolidation, home renovations, or investment in a new property.

Should I refinance my mortgage - the rule of thumb

For the question "Should I refinance my mortgage now?", the rule of thumb could be that if you can lower the new loan's interest rate by at least 1 percent, it might bring you considerable savings that make refinancing a house worth it. When the interest rate drops, you may take a new loan with a lower term but keep the monthly payment similar to the previous one.

Common types of refinance mortgage loans

The most common types of refinance mortgage loans are:

  1. Rate and Term

The most typical reason to refinance a mortgage is to reduce the monthly payment through lower interest rates, called a rate and term program. It’s also a possible way to change an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, which may also be a good opportunity to eliminate your private mortgage insurance (PMI). Learn more about ARM at our ARM mortgage calculator.

  1. Term Reduction

With this refinance program, you can reduce your term to a 10-, 15-, or 20-year mortgage. By paying back your mortgage in a shorter period with a higher monthly payment, you might be able to reduce the total interest charges.

  1. Cash-Out Refinance

A cash-out refinance means that you take out to a larger new loan compared to your existing mortgage balance. In this way, you can receive the difference between your old loan and new loan in cash, which you can use for debt consolidation or an investment property purchase.

How to refinance mortgage?

The home loan refinance procedure can be summed up in the following points:

  1. Set your goal. There might be multiple reasons behind refinancing a mortgage, as we showed in the previous section.
  2. Shop around for the best mortgage refinance rate.
  3. Apply for a mortgage with several lenders. This will give you multiple options with different rates and terms.
  4. Compare the new and the old mortgage using our mortgage refinance calculator.
  5. Choose a refinance lender.
  6. Lock your interest rate. Interest rate cannot change before the loan closes by locking it.
  7. Close on the loan. Check your account to ensure there is no balance on your first loan to avoid additional fees.

How to use the mortgage refinance calculator?

Now that you know how to refinance a mortgage, it is time to understand our home refinance calculator. Here is a guide on how to use it:

  1. Current mortgage

In the first section, you need to give the details of your current mortgage which you would like to refinance:

  • Original mortgage amount - You can give the original loan amount or the outstanding balance of the remaining loan.
  • Due date - Set the date according to the balance previously set.
  • Mortgage term - The remaining or the original loan term.
  • Interest rate - The annual interest rate.
  • Compounding frequency (advanced mode) - How the lender computes interest on the principal.
  1. Mortgage refinancing

In this section, you need to add the details of the new loan you use for mortgage refinance:

  • New due date- The date of the first payment of the new loan.
  • New loan's term.
  • Interest rate.
  • Mortgage points - An upfront fee as a percentage of the new balance.
  • Cost of refinancing.
  • Cash in/out - Set this field if you are about to pay some cash out (positive sign) or cash in (negative sign).
  • Compounding frequency (advanced mode) - How the lender computes interest on the principal.
  1. Payment summary

In this section you can compare the old loan to the new loan, which can support your decision. In addition, you can check the cost of refinancing and the break-even point, which is when savings due to refinancing exceed the costs of the new loan.

What's more, you can follow the progression of balances of the two loans in a chart and check the schedule of both mortgages.


What does it mean to refinance a house?

Refinance a mortgage means switching your old mortgage to a new one with different features, such as:

  • Term;
  • Balance; and
  • Interest rate.

When you refinance a mortgage, your bank pays off the original mortgage with the new one.

What is required to refinance a mortgage?

Typically you need to have at least 20% equity in your home to refinance a mortgage. If you want to eliminate your private mortgage insurance, you may also need 20% equity in your home.

How much does it cost to refinance a mortgage?

The average closing cost to refinance a mortgage in the US is $4,345. This amount may vary depending on the amount borrowed, the location of the property, and the lender.

How long does it take to refinance a house?

A refinance generally takes 30 to 45 days to complete. However, administrative works, such as appraisals or inspections may delay the process. Your refinance will eventually depend on the size of your property and how complicated your finances are.


You should consider the mortgage refinance calculator as a model for financial approximation. All payment figures, balances, and interest figures are estimates based on the data you provided in the specifications that are, despite our best effort, not exhaustive.

For this reason, we created the calculator for instructional purposes only. Still, if you experience a relevant drawback or encounter any inaccuracy, we are always pleased to receive helpful feedback and advice.

Tibor Pál, PhD candidate
Related calculators
Current mortgage
Original mortgage amount
Due date
Mortgage term
Interest rate
Mortgage refinancing
New mortgage's due date
New loan's term
Interest rate
Mortgage points
Costs of refinancing
Cash in / out
Payment summary
Current loan*New loanDifference
Monthly payment$1,347.13$1,248.11-$99.03
Interest rate3.5%2.5%-1%
Term26 years25 years1 year
Total interest$144,593.39$96,219.83-$48,373.56
Total payments$420,305.83$378,714.39-$41,591.44
* The results apply for the remaining part of the loan.
The cost of refinancing your current loan is $4,282.12.
The accumulated savings due to refinancing will exceed the cost of the new loan after 3 years and 8 months.
This means that the break-even point will occur on 20.Feb.2028.
Chart of balances
Check out 47 similar mortgage and real estate calculators 🏠
Adjusted funds from operation (AFFO)ARM mortgageARV… 44 more
People also viewed…

Accounting profit

The accounting profit calculator is a simple tool that helps you to compute and understand the profit of a firm or business from an accounting perspective.

Paycheck Protection Program (PPP)

If your applying for a Paycheck Protection Program loan during the coronavirus pandemic, the calculator will check your eligibility and the terms of the loan.

Social Media Time Alternatives

Check what you could have accomplished if you get out of your social media bubble.


Use our titration calculator to determine the molarity of your solution.
Copyright by Omni Calculator sp. z o.o.
Privacy, Cookies & Terms of Service