Refinance Calculator for Homeowners
Estimate your potential monthly savings by comparing your current mortgage with a new rate-and-term or cash-out refinance. Adjust your loan balance, current payment, interest rate, and loan term to review different refinance scenarios and determine whether refinancing may support your financial goals.
Refinance Calculator
Compare your current mortgage with a new loan and estimate your monthly savings or available cash out.
Replace your current mortgage to potentially lower your monthly principal and interest payment.
CURRENT MORTGAGE
Tell us about your existing loan.
NEW MORTGAGE
Build your proposed refinance.
This calculator provides an estimate for educational purposes only. Actual rates, payments, eligibility and available cash out may vary.
Understanding Your Refinance Options
A refinance calculator compares your current mortgage with a proposed new loan to estimate your new monthly principal and interest payment, potential monthly savings, or available cash out. It can help you evaluate whether replacing your current mortgage may support your payment, equity, or financial goals.
Use the refinance calculator to:
- Compare your current payment with a proposed refinance payment
- Estimate monthly savings from a rate-and-term refinance
- Estimate how much equity may be available through a cash-out refinance
- See how a new interest rate affects your monthly principal and interest payment
- Compare different loan terms before applying
- Review the potential payment impact of borrowing additional funds
Your results are estimates, but they provide a practical starting point before requesting a refinance quote or submitting a loan application.
What Is a Mortgage Refinance?
A mortgage refinance replaces your existing home loan with a new mortgage. Homeowners commonly refinance to lower their interest rate, reduce their monthly payment, change their loan term, or access home equity.
The right option depends on your current mortgage balance, interest rate, monthly payment, home value, available equity, credit profile, and plans for the property.
Rate-and-Term Refinance
A rate-and-term refinance replaces your current mortgage without taking a significant amount of additional cash from the property. The primary goal is usually to change the interest rate, loan term, or both.
A rate-and-term refinance may help you:
- Lower your monthly principal and interest payment
- Replace an adjustable-rate mortgage with a fixed-rate loan
- Shorten the repayment period
- Remove a borrower from the mortgage
- Adjust the loan to better fit your current financial goals
The calculator compares your current monthly principal and interest payment with the estimated payment for the proposed new loan.
Cash-Out Refinance
A cash-out refinance replaces your current mortgage with a larger loan and allows you to receive a portion of your available home equity in cash.
Homeowners may use cash-out refinance proceeds for home improvements, debt consolidation, real estate investments, major expenses, or other financial priorities.
The calculator estimates available cash out using the home value, current principal balance, desired cash amount, interest rate, and selected loan term.
The maximum cash-out estimate is based on approximately 80% of the home’s value, less the current mortgage balance. Actual loan-to-value limits vary by loan program, occupancy type, credit profile, property type, and lender guidelines.
How to Use the Refinance Calculator
Enter the following information to estimate your refinance payment, potential savings, or available cash out.
Refinance Type
Select either a rate-and-term refinance or a cash-out refinance.
Choose rate and term when your main goal is to replace your existing mortgage and compare the current payment with a proposed new payment.
Choose cash out when you want to estimate how much equity you may be able to access while reviewing the payment for a larger replacement mortgage.
Current Principal Balance
Enter the remaining principal balance on your current mortgage. This is the amount still owed before interest, escrow balances, late charges, or other payoff-related costs.
Your actual mortgage payoff may be slightly higher than the principal balance because it can include accrued interest and other charges.
Current Monthly Principal and Interest Payment
Enter the principal and interest portion of your current monthly mortgage payment.
Do not include property taxes, homeowners insurance, mortgage insurance, homeowners association dues, or other escrowed costs. The calculator compares principal and interest payments so the current and proposed loans are measured consistently.
Estimated Home Value
For a cash-out refinance, enter the estimated current value of the property. The calculator uses this amount to estimate available equity and a potential maximum cash-out amount.
The final value used for your refinance may be determined through an appraisal, automated valuation model, property inspection, or another valuation method accepted by the lender.
Desired Cash Out
Enter the amount of equity you would like to receive from the refinance.
The desired cash-out amount increases the proposed loan balance and generally increases the monthly payment. The calculator will also show an estimated maximum based on the information entered.
New Interest Rate
Enter the mortgage rate you want to evaluate. Even a modest rate change can materially affect the payment, especially on larger loan balances.
Your actual refinance rate will depend on market conditions, credit, equity, occupancy, property type, loan amount, loan program, and other file details.
New Loan Term
Select the repayment period for the proposed mortgage. A 30-year term generally provides a lower monthly payment, while a shorter term may reduce the total interest paid over the life of the loan.
Refinancing into a new 30-year loan may lower the monthly payment, but it can also extend the amount of time you remain in debt. Compare the payment benefit with your long-term plans before moving forward.
What Does the Refinance Calculator Estimate?
New Monthly Payment
The calculator estimates the monthly principal and interest payment for the proposed refinance based on the new loan balance, interest rate, and loan term.
The estimate does not include property taxes, homeowners insurance, mortgage insurance, homeowners association dues, or other housing expenses.
Estimated Monthly Savings
For a rate-and-term refinance, the calculator subtracts the proposed monthly principal and interest payment from the current monthly principal and interest payment.
A lower proposed payment produces estimated monthly savings. A higher proposed payment may still make sense when shortening the loan term, consolidating debt, removing mortgage insurance, or pursuing another financial goal.
Estimated Cash Out
For a cash-out refinance, the calculator estimates how much equity may be available after accounting for the current mortgage balance.
The final amount received at closing may be reduced by closing costs, prepaid expenses, payoff adjustments, subordinate liens, and other transaction charges.
Monthly Payment Difference
The cash-out refinance result shows the difference between your current principal and interest payment and the estimated payment for the proposed new loan.
This helps you evaluate the monthly cost of accessing additional equity.
How Is a Refinance Payment Calculated?
A refinance estimate generally follows these steps:
- Use the current principal balance as the starting loan amount.
- Add the desired cash-out amount when applicable.
- Apply the proposed interest rate and selected loan term.
- Calculate the estimated monthly principal and interest payment.
- Compare the proposed payment with the current principal and interest payment.
- Estimate monthly savings or the monthly payment difference.
For cash-out transactions, the calculator also compares the proposed loan amount with the estimated property value to determine whether the requested cash amount may fit within the assumed equity limit.
How Much Can I Save by Refinancing?
Potential refinance savings depend on the difference between your current payment and the proposed payment.
A lower interest rate may reduce your monthly payment, but the interest rate alone does not determine whether refinancing makes financial sense. You should also consider closing costs, the new loan term, the remaining term on your current mortgage, and how long you expect to keep the property.
For example, saving $300 per month may appear attractive, but the benefit should be weighed against the cost of completing the refinance.
What Is the Refinance Break-Even Point?
The refinance break-even point estimates how long it may take for monthly savings to recover the closing costs of the new loan.
For example, if refinancing costs $6,000 and lowers the monthly payment by $300, the basic break-even period would be approximately 20 months.
This calculation does not account for every financial factor, but it can help determine whether you are likely to keep the mortgage long enough to benefit from the refinance.
How Much Cash Can I Take Out of My Home?
The amount of cash available depends on the property value, current mortgage balance, loan program, occupancy type, credit profile, and lender requirements.
Many conventional cash-out refinance programs limit the new loan to approximately 80% of the property’s value for a primary residence. Limits may be lower for investment properties, second homes, larger loan amounts, or borrowers with certain credit profiles.
The calculator uses an estimated 80% loan-to-value limit for planning purposes. Your actual maximum cash out may be higher or lower.
How Does Home Equity Affect a Cash-Out Refinance?
Home equity is the difference between the property’s current value and the amount owed against it.
For example, a homeowner with a property worth $800,000 and a mortgage balance of $400,000 has approximately $400,000 in gross equity. That does not mean the full $400,000 can be withdrawn.
The lender generally requires a portion of the equity to remain in the property after the refinance. Closing costs and other liens may also reduce the cash received.
How Does the Interest Rate Affect a Refinance?
The proposed interest rate affects both the monthly payment and the cost of borrowing over time.
A lower rate generally reduces the principal and interest payment when the loan balance and term remain unchanged. However, a cash-out refinance may carry a higher balance than the current loan, which can increase the payment even when the new rate is lower.
Testing multiple rates can help you understand how different refinance scenarios may affect your monthly budget.
How Does the Loan Term Affect a Refinance?
The loan term determines how long the new mortgage is scheduled to remain outstanding.
A longer term generally lowers the monthly payment by spreading repayment over more years. A shorter term generally increases the monthly payment but may reduce total interest and help you build equity faster.
When comparing refinance options, consider both the new payment and the number of years being added to or removed from your repayment timeline.
Refinance Calculator Examples
Rate-and-Term Refinance Example
A homeowner has a remaining mortgage balance of $500,000 and currently pays $3,750 per month in principal and interest.
The homeowner can enter a proposed interest rate and 30-year loan term to estimate the new monthly payment. The calculator will then show the difference between the current and proposed payments.
Cash-Out Refinance Example
A homeowner has a property valued at $750,000 and a current mortgage balance of $400,000.
Using an estimated 80% loan-to-value limit, the maximum proposed loan amount would be approximately $600,000 before accounting for closing costs and other charges. The homeowner may have up to approximately $200,000 in gross cash-out capacity based on those assumptions.
The actual amount available could be lower after lender requirements and transaction costs are applied.
When Does Refinancing Make Sense?
Refinancing may be worth reviewing when:
- Current mortgage rates are more favorable than your existing rate
- You want to reduce your monthly payment
- You want to replace an adjustable-rate mortgage
- You want to shorten or extend the loan term
- You have enough equity to access cash
- You want to consolidate higher-interest debt
- Your credit or financial profile has improved
- Your current mortgage no longer fits your goals
The payment estimate is only one part of the decision. Closing costs, break-even timing, equity, and long-term interest should also be considered.
Refinance Calculator Results Are Estimates
The refinance calculator is provided for educational and planning purposes. It does not represent a loan approval, commitment to lend, guaranteed interest rate, property valuation, or final loan estimate.
The calculator estimates principal and interest payments only. It does not include property taxes, homeowners insurance, mortgage insurance, homeowners association dues, closing costs, prepaid expenses, escrow adjustments, subordinate liens, or every fee that may apply to a refinance.
Cash-out proceeds are estimated using approximately 80% of the property value less the current principal balance. Actual loan-to-value limits and cash available at closing depend on the loan program, property, occupancy, credit profile, appraisal, mortgage payoff, and lender guidelines.
A refinance review can provide a more accurate comparison of your current mortgage, available equity, closing costs, projected payment, and potential savings
Smart Resources for Refinancing Success
Find out when and how to refinance your mortgage with confidence. Use our rate alerts, market insights, and refinance tools to save more and stress less.
LendFriend's Rate Alerts
Thousands of smart homebuyers and homeowners have used LendFriend’s rate alerts to lock in lower rates at just the right time — saving money on their mortgage payments for years to come. Here are just 2 examples of borrowers who saved thousands with our Rate Alert.
The REcap: Mortgage and Market Insights
Stay ahead of the market with weekly insights on mortgage rates, housing trends, and what’s driving the U.S. economy — all in one place from the LendFriend team. Delivered straight to your inbox every Monday at 9AM CT.
LendFriend's Learning Center
Your go-to resource for mortgage advice, real estate trends, and expert educational content. Our guides will help you succeed at refinancing with confidence when the time is right.
FAQs: Refinancing Your Mortgage
Can I refinance without paying closing costs upfront?
A no-closing-cost refinance may allow you to reduce or avoid upfront lender fees by accepting a higher interest rate or adding eligible costs to the new loan balance. It can make sense when preserving cash is a priority, but the long-term cost should be compared with a traditional refinance before moving forward.
Will I need an appraisal to refinance my mortgage?
A home appraisal is generally required for a cash-out refinance because the lender must confirm the property’s current value and available equity. Preparing for a refinance appraisal can help support an accurate valuation. Some rate-and-term borrowers may qualify for a no-appraisal refinance, which can reduce documentation and shorten the closing timeline.
How does a cash-out refinance work?
A cash-out refinance replaces your current mortgage with a larger loan and pays the difference to you at closing, subject to equity and loan-to-value requirements. An experienced broker can help make the cash-out refinance process easier to navigate and identify a cash-out refinance option aligned with your property, income, and financial goals.
It’s worth considering if you can secure a reasonable interest rate and your monthly budget supports the new payment.
Can I qualify for a cash-out refinance if I am self-employed?
Yes. A self-employed cash-out refinance may use bank deposits instead of traditional tax-return income when large business deductions make conventional qualification difficult. You can estimate qualifying income with the bank statement loan calculator and review additional self-employed mortgage options based on your cash flow, equity, and documentation.
Can I refinance using home equity if my income is limited?
Some homeowners may qualify for a cash-out refinance based primarily on substantial home equity rather than conventional income documentation. A home-equity-based cash-out refinance may be available for borrowers with significant property value, strong reserves, and limited documented income who want to access liquidity without selling the home.
How do I know whether refinancing makes sense?
Start by comparing your current interest rate, remaining balance, monthly payment, loan term, closing costs, and expected time in the property. LendFriend can review your mortgage refinance options and help determine whether lowering the payment, shortening the term, changing loan programs, or accessing equity supports your goals.
What other mortgage calculators can help me evaluate my options?
LendFriend’s mortgage calculators can help you estimate payments, home affordability, bank statement income, asset depletion income, DSCR qualification, and other financing scenarios. These tools provide useful planning estimates before you request a personalized loan review.
Can I refinance a completed fix-and-flip property into a long-term rental loan?
Yes. Investors can often refinance a finished flip into a 30-year DSCR loan using the property’s rental income rather than personal employment income. Review available DSCR loan programs and use the DSCR loan calculator to estimate whether the projected rent can support the new mortgage payment.