Mortgage Refinance Calculator

A refinance replaces your current mortgage with a brand-new loan — typically with a new interest rate, new term, and new closing costs. The new loan pays off your existing one, and you start making payments on the new loan instead. People refinance to lower their rate, change their term, switch loan types, remove mortgage insurance, or tap into home equity with a cash-out refinance.

Closing costs on a refinance typically run 2% to 6% of the loan amount, covering things like the appraisal, title search and insurance, origination fees, and recording fees. Some lenders offer a "no-closing-cost" refinance, where those costs are rolled into the loan balance or offset with a slightly higher rate instead of being paid upfront.

Your break-even point is how long it takes your monthly savings to repay your closing costs — calculated as closing costs ÷ monthly savings. As a rule of thumb, refinancing tends to make sense if your break-even point is comfortably shorter than how long you plan to stay in the home. A break-even point under 2–3 years is generally considered strong; anything beyond how long you expect to own the home usually isn't worth it.

Rate-and-term refinance: You simply replace your existing mortgage with a new one at a different rate and/or term. Your loan balance stays roughly the same (aside from any rolled-in closing costs).

Cash-out refinance: You borrow more than you currently owe and pocket the difference in cash, using your home's equity. This usually comes with a slightly higher rate than a rate-and-term refinance and reduces your equity cushion.

Applying for a refinance involves a hard credit inquiry, which can cause a small, temporary dip in your score — typically a few points. Multiple refinance inquiries within a short shopping window (usually 14–45 days, depending on the scoring model) are generally counted as a single inquiry. Making your payments on time on the new loan helps your score recover and build over time.

Most refinances close within 30 to 45 days from application, similar to a purchase loan — the process includes an application, income and asset verification, appraisal, underwriting, and closing. Cash-out refinances and more complex financial situations can take a bit longer.

Yes. Government-backed loans have their own streamlined refinance options — the FHA Streamline Refinance, VA Interest Rate Reduction Refinance Loan (IRRRL), and USDA Streamlined Assist Refinance — which often require less documentation and no new appraisal. You can also refinance into or out of a conventional loan depending on your equity and eligibility. Unlike a recast, refinancing is available on every major loan type.

If current market rates are meaningfully below your existing rate, or you want to change your term or loan type, a refinance is usually the better tool. If you're happy with your rate and just have a lump sum to put toward principal, a mortgage recast is a much cheaper way to lower your payment. Try both calculators and compare — or contact Robert Hendley to talk through which one fits your goals.