Refinance Mortgage Calculator — Should You Refinance? 2026 Guide
See whether refinancing pays off — compare rates, terms and closing costs.
What Is Mortgage Refinance?
Refinancing replaces your current mortgage with a new loan, usually to get a lower interest rate, change the loan term, switch loan types or pull cash out of your home equity.
When Does Refinancing Make Sense?
Refinancing makes sense when you can lower your interest rate enough to recover closing costs within a reasonable time, or when you want to change your loan term. A common rule of thumb is that your new rate should be at least 1% lower, but a shorter term or lower monthly payment can also justify it.
How to Calculate Your Refinance Break-Even Point
To find your break-even month, divide your total closing costs by your monthly savings. For example, if refinancing saves you $250 a month and costs $6,000 in fees, you break even in 24 months. After that, every month is pure savings.
Refinance Costs and Fees
Closing costs on a refinance typically run 2% to 5% of the loan amount. They include the appraisal, title insurance, loan origination fee, credit report and recording fees. Some lenders offer no-cost refinances that add these costs to the loan balance instead.
Types of Refinance (Rate-and-Term, Cash-Out)
A rate-and-term refinance changes your interest rate, term, or both without changing your balance. A cash-out refinance lets you borrow against your home equity for renovations or debt consolidation. Use a mortgage calculator to model both scenarios before deciding.
Frequently Asked Questions
How much does refinancing cost?
Closing costs typically range from 2% to 5% of the loan amount and include appraisal, title insurance, and origination fees. Factor them into your break-even calculation before you commit.
How many times can I refinance?
There is no legal limit on how often you can refinance, but each refinance has closing costs and a new credit check. Only refinance when the savings clearly outweigh the costs.
Does refinancing hurt your credit score?
Refinancing requires a hard credit inquiry, which may lower your score slightly. Multiple applications within a short window are usually counted as a single inquiry for credit-scoring purposes.