Mortgage refinance calculator

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How to use this calculator

To get the most use out of Bankrate’s mortgage refinance calculator, it helps to have your most recent mortgage statement handy. This will give you the numbers you need to fill in several fields. Once you have the numbers in front of you, follow these steps:

Input your current monthly payment or remaining term length: You can switch between these by changing the displayed balance type (remaining balance or original loan amount).
Enter your current interest rate: The calculator allows you to input the precise rate down to thousandths of a percent (three decimal places) for a more accurate estimate.
Add the new interest rate: Here, input the rate you’ll get — or the rate you want — with your refinance. If you haven’t shopped around for rates yet, you can check out current mortgage rates from various lenders.
Input your new loan term: A shorter term comes with higher monthly costs (because you’re paying it back over less time) but bigger savings over the life of the loan.
Enter fees: It’s hard to know exactly how much closing costs will be until you’re well into the refinancing process. However, you can get a rough idea by checking out Bankrate’s guide to refinancing costs.
Enter points (optional): It’s not mandatory, but you can opt to pay mortgage points to decrease your interest rate. One point typically costs 1% of the loan amount and reduces your rate by a quarter of a percentage point. If you’re not planning on buying points, enter 0.
Input the cash-out amount (optional): If you’re considering a cash-out refinance, enter the amount you want to take out here. If you’re not planning on taking cash out, enter $0.

Understanding your results

Once you’ve plugged all the numbers into the calculator, you can use the key outputs to determine whether a refinance makes sense. Here’s how to interpret your results:

Monthly savings: Shows how much you'd save on monthly payments by refinancing your mortgage.
Difference in interest: Shows how much you would save in interest by refinancing.
Total cost: Represents the total amount it will cost to refinance your mortgage.
Months to recoup costs: Tells you how long it will take to reach your break-even point and begin realizing the savings from your refinance. For example, if your closing costs will be $4,800, and your monthly savings are $200, then you’ll break even in 24 months. If you plan to be in the house well past two years, a refinance could be a good move.

How mortgage rates can impact your decision

Mortgage rates are central to determining whether a refinance will save you money. Generally, you want your new rate to be at least 0.5% lower to be worth your while. But that figure might be higher depending on your loan balance, term and how long you plan to stay in your home.

Timing your refinance application can be tricky, as rates change constantly. For example, the average 30-year fixed mortgage rate hit 7.19% in January 2025, only to drop to 6.18% by January 2026. That’s a major difference when it comes to refinancing.

Keep these fluctuations in mind as you’re beginning to plan. If it doesn't make sense to refinance under the current market conditions, wait while continuing to track the rates. And if you stand to gain significant savings with today’s rates, act fast.

What is mortgage refinancing?

Mortgage refinancing (a “refi” for short) means you replace your current home loan with a new one. The borrowed funds from your new mortgage pay off your existing loan. Most people refinance to lock in a lower interest rate or to shorten the mortgage term. Some refis also let you borrow an additional amount in cash.

Factors that affect your mortgage refinance

You need to qualify for a refinance much the way you did for your original mortgage. The terms you’ll receive depend on several factors, including:

Credit score: Most lenders like to see a minimum of 620, but higher is better.
Debt-to-income ratio: Generally, lenders like to see 43% or less of your gross monthly income go toward debt payments, including your mortgage. A higher ratio may be permitted if you have a lot of savings or other compensating factors.
Solid payment history: If you have recently been late on or missed mortgage payments, it may be difficult to qualify for a refinance.
Loan-to-value ratio: Typically, lenders want you to have at least 20% equity in your home to refinance your mortgage.

You'll also need to prove that you have sufficient income to afford the new payments and provide similar financial documentation to that you supplied when securing your existing mortgage.

What to consider next

Is now the right time to refinance your mortgage? The answer might be no — especially if current rates are not significantly lower than the rate you already have — and that’s OK. Refinancing costs a fair amount of money upfront, and if it’s not worth your while right now, then it’s smarter to wait.

But if you’ve reviewed the numbers and decided that refinancing makes sense, then it’s time to shop around for a refinance lender. Check with your current mortgage servicer, as well as national banks, credit unions, online mortgage lenders and possibly a mortgage broker to compare refinance rates and terms.

When you narrow it down to a few lenders you’re interested in, apply for preapproval. Lenders will send you a loan estimate that breaks down your new loan details, including the interest rate and all fees. Loan estimates are great tools for comparison shopping, as you'll get the clearest picture of which lender will help you meet your refinance goals.