Mortgage Refinance Calculator
Compare your current mortgage with a refinance offer. See monthly savings, break-even months, and lifetime interest cut. US/EU/CA-friendly math, no signup.
Mortgage Refinance Calculator
Enter your current mortgage on the left, the refinance offer on the right, with its closing costs and any points. The tool compares the two loans month by month and shows when the refinance has actually paid for itself — not just when the payment saving has covered the costs.
📋 Current mortgage
✨ Refinance offer
Assumptions: fixed rates on both loans; principal and interest only (no taxes, insurance or PMI); totals are nominal dollars, not discounted, and no return is counted on the money a lower payment frees up. The break-even counts the balance you would still owe on each loan, so a longer new term — which repays principal more slowly — breaks even later than the shortcut says.
How to Use the Mortgage Refinance Calculator
Look up your current mortgage balance
Your most recent statement shows the remaining principal — that's the figure to enter in Remaining balance. Use the principal, not your home's market value.
Enter your current rate and years left
Use the interest rate on your statement (the note rate). Years left is the remaining term — a 30-year loan opened 4 years ago has 26 years left.
Enter the refinance offer details
The Loan Estimate (LE) from a lender shows the offered interest rate, term, points and closing costs. Enter the interest rate itself, not the APR: the APR already folds in points and fees (CFPB), and this tool adds those separately, so entering the APR would count them twice. Use the APR to compare one lender's offer with another's.
Add your closing costs and read the verdict
Freddie Mac says to expect refinancing to cost 3%–6% of the loan principal. Add any discount points (each is 1% of the new loan) and say whether you will pay them at closing or roll them into the loan. The tool then shows two break-evens: the usual shortcut, costs ÷ monthly saving, and the month you are genuinely ahead once the balance still owed on each loan is counted.
Mortgage Refinancing in the United States — When the Math Actually Works
The Refinance Decision: Three Numbers That Matter
US homeowners refinance for one of three reasons: lower the monthly payment, cut the total interest paid, or pull cash out. The math is identical to a fresh mortgage — what changes is what you're trading. Every refinance carries closing costs (lender origination, title services, appraisal, government recording fees), and those costs need to be recovered through interest savings before the refinance is genuinely a win. Freddie Mac tells borrowers to expect refinancing to cost 3%–6% of the loan principal, and notes that a "no-cost" refinance usually means a higher rate with the costs rolled into the loan.
The single most important number in any refinance decision is the break-even point. The usual shortcut divides the costs by the monthly saving: save USD 200 a month on USD 4,500 of costs and you are even after 22.5 months. That shortcut is only honest when the new loan ends when the old one would have. Stretch the term and part of the "saving" is just slower repayment — you still owe more on the new loan than you would have on the old one — so this tool also tracks the month at which payments saved, minus the costs, plus the difference in the balances you would still owe, turns positive. On the default figures the shortcut says 27 months and the full count says 30. Sell or refinance again before that month and the costs absorb the gain.
The second number is lifetime interest. Refinancing into a fresh 30-year loan when you only had 22 years left on your old mortgage doesn't just cut your rate — it resets the clock. Even at a meaningfully lower rate, the longer amortization can mean more total interest paid over the life of the loan. The Freddie Mac Primary Mortgage Market Survey publishes a weekly average 30-year rate and is the benchmark the financial press quotes.
When Refinancing Makes Sense (and When It Doesn't)
The classic rule of thumb — refinance when rates drop 1 percentage point — was useful when origination fees were higher and online comparison shopping wasn't normal. Today, the right test is the break-even point against how long you plan to keep the home. A 0.5pp drop on a USD 400,000 loan saves roughly USD 130 per month; against USD 6,000 in closing costs, that's a 46-month break-even. Plausible if you're staying 5+ years, marginal otherwise.
Refinancing also makes sense to remove private mortgage insurance (PMI). If your home appreciated enough that your loan-to-value (LTV) ratio dropped below 80%, a refinance can drop the PMI premium — Freddie Mac puts PMI at roughly USD 30–70 a month for every USD 100,000 borrowed. That's a saving that does not depend on rates moving. When comparing lenders, the CFPB describes the APR as the broader measure: it reflects the interest rate plus points, broker fees and other charges.
"On a USD 300,000 30-year loan at 6–7%, every 0.25 percentage point of rate matters: it shifts the monthly payment by roughly USD 50 and the total 30-year interest by roughly USD 18,000."
Cash-Out, Rate-and-Term, and Stream-Lined Refinances
There are three flavours of US refinance worth knowing. A rate-and-term refinance swaps your loan for one at a different rate or term, without taking equity out. A cash-out refinance increases the loan balance and gives you the difference in cash, up to a loan-to-value limit the lender and loan programme set. A streamline refinance on certain government-backed loans (FHA, VA, USDA) cuts the paperwork — often no new appraisal — but stays inside the same programme and does not pay out cash.
For Europeans, the analogous instruments are a remortgage to a new lender (the UK term) or an "Umschuldung" in Germany — same math, different paperwork and different early-repayment charges, which your contract and national law set. In the US, Regulation Z (12 CFR 1026.43(g)) allows a prepayment penalty only on a fixed-rate qualified mortgage that is not higher-priced, only in the first three years, and at most 2% of the amount prepaid in years one and two and 1% in year three — always check the loan note, and put any penalty on the old loan into the closing costs above.
The calculator above models the rate-and-term case. A cash-out refinance adds new borrowing your current loan does not have, so adding the cash to the balance would count the money you take out as a cost of refinancing. Compare the cash-out offer against keeping your loan and borrowing the cash separately — our HELOC calculator does the second half — and ask the lender how the cash-out affects the rate it quotes.
Refinancing in Singapore — Repricing, Lock-Ins and the Legal Subsidy Clawback
Everything above describes the US market, where a 30-year fixed rate is the default product. That product barely exists in Singapore, so the decision has a different shape — and two local costs decide it that the US framing never mentions.
Repricing and refinancing are two different moves
Repricing means switching to a new package with the bank you already have. Refinancing means moving the loan to a different bank. Repricing is usually faster and cheaper — often a flat administrative fee, with no new valuation and no fresh legal work — while refinancing is where the better headline rates tend to sit. Because most Singapore packages reset every one to three years, this is a decision you revisit on a schedule rather than once in a mortgage's life. Run both through the calculator above: reprice as a low-closing-cost row, refinance as a higher one.
The two costs that decide the break-even
Lock-in penalty. Many packages carry a lock-in period, and redeeming inside it triggers a penalty stated as a percentage of the amount redeemed. At 1.5%, a S$500,000 balance costs S$7,500 — on its own often enough to push a marginal refinance past its break-even.
Legal subsidy clawback. This is the one borrowers miss. When you took the loan, the bank most likely subsidised your legal and valuation fees. That subsidy is conditional: redeem or refinance away within the clawback window your letter of offer sets, and it becomes repayable. It is not a penalty for doing anything wrong, it is the subsidy being reversed, and it lands in the same month as everything else you are paying.
Both figures belong in the closing costs field above. Leave them out and the break-even the calculator returns will be optimistic by exactly the amount you forgot — which is the specific way this decision is usually got wrong.
Before you commit
Floating packages here are usually priced off SORA, the Singapore Overnight Rate Average that MAS publishes, so the rate resets on a published benchmark rather than a bank-set one. Ask the new bank how MAS's TDSR rules apply to your refinance before you pay any fees.
Terms differ by bank and by vintage, and yours were fixed on the day you signed — so treat the figures above as the market shape, not as your contract. Your letter of offer is the authority: it states your lock-in end date, your penalty percentage, and your clawback window. Read those three numbers off it before you run the comparison, because they are the inputs that actually decide the answer.
Closing costs over monthly savings, and the 78% where PMI stops
The Freddie Mac PMMS is the most widely-cited benchmark for US 30-year fixed mortgage rates — published every Thursday at noon ET, and since November 2022 built from loan applications rather than a lender survey.
The CFPB's Loan Estimate is a federally-standardised three-page document — lenders must deliver it within three business days of an application.
Freddie Mac tells borrowers to expect refinancing to cost 3%–6% of the loan principal — USD 9,000–18,000 on USD 300,000.
IRS Publication 936 (2025 returns): mortgage interest is deductible on the first USD 750,000 of debt (USD 375,000 married filing separately), or USD 1 million for debt taken on before 16 December 2017.
Private Mortgage Insurance (PMI) automatically terminates when the loan reaches 78% LTV based on the original amortization schedule (Homeowners Protection Act).
The APR on a Loan Estimate includes points and most lender fees — comparing APRs across offers is the apples-to-apples comparison, not the headline note rate.
Regulation Z caps a US prepayment penalty at 2% of the amount prepaid in years one and two, 1% in year three, and none after — and allows one only on a fixed-rate qualified mortgage that is not higher-priced.
A 0.25 percentage point drop on a USD 300,000 30-year mortgage at 6–7% cuts the monthly payment by roughly USD 50 and saves roughly USD 18,000 over the life of the loan.
A "no-cost" refinance is not free: Freddie Mac notes the lender is probably charging a higher rate and rolling the closing costs into the loan.
The rule of thumb — costs ÷ monthly saving — flatters a longer term: it counts slower repayment as a saving. On this page's defaults it says 27 months; counting the balances, 30.
Frequently Asked Questions
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The usual answer is the number of months your monthly saving needs to cover the costs: USD 5,000 of costs and USD 250 a month saved is 20 months. That is right only if the new loan ends when the old one would have. If the new term is longer, part of the lower payment is just slower repayment, so this tool also finds the first month in which you are genuinely ahead: payments saved, minus the costs, plus the difference between what you would still owe on each loan. Compare that month with how long you expect to keep the loan — if you sell or refinance again before it, the costs absorb the gain.
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Freddie Mac tells borrowers to expect refinancing to cost 3%–6% of the loan principal. On a USD 300,000 loan that is USD 9,000–18,000, covering lender origination, appraisal, credit report, title services, government recording and similar fees — the Loan Estimate itemises each. A "no-cost" refinance is, in Freddie Mac's words, not a free loan: the lender is probably charging a higher rate and rolling the costs in. Run it both ways here — once with the costs, once at the higher rate with costs of zero.
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Compare offers by APR; calculate with the note rate. The note rate is the interest rate itself; the CFPB describes the APR as a broader measure that also reflects points, broker fees and other charges. In this calculator enter the note rate and put the points and costs in their own fields, or they would be counted twice. Two offers with the same note rate can have very different APRs depending on the fee structure. Lenders are required to disclose APR on the Loan Estimate within three business days of your application.
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Yes — by default. If you're 6 years into a 30-year mortgage and refinance into a new 30-year, you've added 6 years of payments. Even at a lower rate, the longer amortization can mean more total interest. To avoid this, refinance into a 15-, 20-, or "custom" term that matches your remaining years. A 24-year refinance keeps you on your original payoff date, and some lenders offer custom terms — ask. The tool shows the payment at the new rate over your current remaining term beside the offer, so you can see how much of the saving is the rate and how much is the longer term.
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A rate-and-term refinance swaps your existing loan for one at a different rate or term, with no cash extracted — the new principal equals your current remaining balance plus rolled-in closing costs. A cash-out refinance increases the loan balance beyond what you owe and gives you the difference as a lump sum. Lenders cap how much of your equity you can take out, and may price a cash-out loan differently — ask for both quotes. Cash-out can be useful for funding renovations or consolidating high-rate debt, but pulls equity out and resets the amortization.
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Often. If your home value rose enough that your loan-to-value (LTV) ratio dropped below 80%, refinancing into a new loan without PMI removes a cost Freddie Mac puts at roughly USD 30–70 a month for every USD 100,000 borrowed. Check the cheaper routes first: under the Homeowners Protection Act you can ask your servicer to cancel PMI once the balance reaches 80% of the home's original value, and it ends automatically on the date the original schedule reaches 78% (CFPB) — no closing costs either way.
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A streamline refinance is a simplified process available on certain government-backed loans — FHA, VA, and USDA. It cuts the paperwork — often no new appraisal — which can lower costs and shorten the timeline. You stay within the same loan programme and take no cash out. Each programme (FHA, VA, USDA) sets its own eligibility rules, so ask your current servicer or an approved lender.
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The Freddie Mac Primary Mortgage Market Survey (PMMS) publishes every Thursday at noon ET. Since 17 November 2022 it is no longer a lender survey: it averages the rates on thousands of 30-year fixed-rate applications submitted to Freddie Mac's Loan Product Advisor over the prior Thursday-to-Wednesday week. The PMMS is the most widely-cited US mortgage benchmark and is the rate the financial media reports as "the average 30-year mortgage rate this week". Your actual offered rate depends on your credit score, LTV, loan size, and property type — it can be meaningfully above or below the PMMS headline.
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The US 30-year fixed-rate mortgage is a product most of Asia does not offer. Singapore and Malaysia packages are mostly floating or fixed for a few years, reference a published benchmark (SORA in Singapore) or the bank's own base rate, and often carry a lock-in penalty for leaving early. In Singapore the choice is "repricing" (a new package with your bank) or "refinancing" (moving banks), and MAS's debt-servicing rules sit behind both — ask the bank how they apply to you. The arithmetic here works for either: enter the penalty and any legal-subsidy clawback as closing costs, and the remaining years of your current package as the term. If you have a Singapore mortgage, see our Singapore Mortgage Calculator.
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It's harder but feasible. US lenders lean heavily on US credit history, so a recent arrival may be quoted a higher rate or turned down for the best programmes. The usual routes are to wait until you have built a US credit record, to ask lenders whether they have foreign-national or newcomer programmes, to borrow less against the home (more equity offsets thinner credit), or to add a co-borrower with an established record. Whatever you are offered, put its rate, points and costs into the calculator above: the arithmetic of the decision does not change with your passport.
Method & sources
How it computes
Both loans amortised month by month in whole cents (r = note rate ÷ 12). Costs = closing costs + points (% of the new loan), paid in cash or rolled in (new loan = (balance + costs) ÷ (1 − points)). Break-even = first month in which payments saved − cash at closing + (old balance − new balance) ≥ 0, shown beside the costs ÷ saving shortcut. Lifetime = old payments − new payments − cash at closing (MortgageKernel.refinance).
What this tool implements
- Both loans run on the site's one integer-cent amortisation (MortgageKernel.amortize): interest on the opening balance each month, the final payment absorbing the rounding residual; Freddie Mac's own table ($300,000 over 30 years: 6.15% → $1,828 … 6.75% → $1,946) is reproduced to the dollar in the test suite.
- Two break-evens, labelled: the shortcut (costs ÷ monthly payment saving, rounded up) and the balance-adjusted month — the first month at which payments saved, less the cash paid at closing, plus the difference between the balances still owed, is not negative. A longer new term breaks even later than the shortcut says; a same-term rate cut sooner.
- Points are a percentage of the new loan; rolled in, the loan is (balance + closing costs) ÷ (1 − points) so the points are charged on the loan they belong to. Totals are nominal, not discounted; no return is counted on money a lower payment frees; both rates are fixed. The page also shows the new rate over the current remaining term, so rate and term can be told apart.
- Market facts quoted from primary pages: Freddie Mac (refinance costs 3%–6% of the loan principal; PMI about USD 30–70 a month per USD 100,000; a "no-cost" refinance usually means a higher rate with the costs rolled in; PMMS released Thursdays at 12 p.m. ET from Loan Product Advisor applications since 17 Nov 2022); CFPB (APR vs interest rate; Loan Estimate within three business days; PMI cancellation at 80% and termination at the scheduled 78%); Regulation Z 12 CFR 1026.43(g) on prepayment penalties; IRS Publication 936 (2025) on the USD 750,000 limit.
- Corrected 2026-10-17: Freddie Mac's 2–5% (its PURCHASE closing-cost range) was quoted for refinancing, where it says 3%–6%; readers were told to enter the APR as the rate, which double-counts fees the tool adds separately; only the shortcut break-even was shown; no points and no rolled-in costs; the default USD 4,500 of costs (1.6% of the balance) was below Freddie Mac's range; removed as unverifiable — a 36-month "attractive" rule, the EU Mortgage Credit Directive compensation cap, TDSR leniency on refinancing, "typical" 1.5% lock-in and three-year clawback figures, named banks, FICO and rate-premium figures; the advice to add cash-out to the balance (counts borrowed cash as a cost); float annuity; grouped input ("280,000") read as 0.
Sources
- Freddie Mac, My Home. Planning to refinance (3%–6% of the loan principal; $300,000 30-year payment table). https://myhome.freddiemac.com/refinancing/planning-to-refinance
- Freddie Mac, My Home. Costs of refinancing ("no-cost refinance"). https://myhome.freddiemac.com/refinancing/costs-of-refinancing
- Freddie Mac, My Home. Breaking down PMI ($30–$70 a month per $100,000 borrowed). https://myhome.freddiemac.com/buying/breaking-down-pmi
- Freddie Mac. Primary Mortgage Market Survey (methodology and weekly results). https://www.freddiemac.com/pmms
- Consumer Financial Protection Bureau. What is the difference between a mortgage interest rate and an APR? (last reviewed 28 Aug 2026). https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-b…
- Consumer Financial Protection Bureau. What is a Loan Estimate? https://www.consumerfinance.gov/ask-cfpb/what-is-a-loan-estimate-…
- Consumer Financial Protection Bureau. When can I remove private mortgage insurance (PMI) from my loan? https://www.consumerfinance.gov/ask-cfpb/when-can-i-remove-privat…
- Regulation Z, 12 CFR §1026.43(g) Prepayment penalties (eCFR, read 2026-10-17). https://www.ecfr.gov/current/title-12/section-1026.43
What can make this go out of date
- None at runtime; the tool uses the rates and costs the reader enters, and nothing is sent anywhere.
Abridged — the full review record for this tool runs longer than the list above.
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