Refinancing a Home – Home Refinancing Calculator

Should I refinance my home?

There are a variety of reasons you may want to refinance your home:

  • To reduce your monthly payment
  • To reduce the total interest you will pay
  • To change the type of interest rate, such as from adjustable to fixed
  • To shorten the length of the loan
  • Cash out some of the equity you have in the home

It’s always tempting to reduce your monthly mortgage payment. This is usually a good thing as it will free up money to put towards your other financial goals or investments. However, it may not actually be saving you money in the long run, especially if you’ve had your current mortgage for more than 10 years.

That being said, it’s still possible to save money on the total interest you will pay during the life of your mortgage. For example, if interest rates are considerably lower now than when you started the mortgage, this could potentially save you tens of thousands of dollars. There may also be a situation where you originally started with an adjustable-rate mortgage that has recently increased the interest rate on your mortgage. Refinancing to a fixed-rate mortgage could also save you money on interest.

Other situations in which you might want to refinance would be to shorten the length of the loan. Consider if you started a 30-year mortgage 5 years ago. Since then your income has increased, and you can afford the higher payments on a 15-year mortgage. Refinancing would enable you to pay your mortgage off 10 years sooner! Not to mention you will likely save thousands on interest.

You might also want to cash out some of the equity in your home to pay for something else, such as home repairs. This may not result in any savings because you are borrowing more money, but this could be a helpful tool to have available.

How much money will I save refinancing my home?

Every situation is different, so there’s no one-size-fits-all answer. Sometimes refinancing a home is a great idea and can save you a lot of money. Other times, it might seem enticing even though it will ultimately cost you. Try the calculator below and compare it to your budget so you can make the best decision for yourself.


Original Mortgage –

  • Mortgage Amount – The amount borrowed on your original mortgage.
  • Interest Rate – The interest rate on your original mortgage. If your original mortgage was an adjustable-rate mortgage, you can put the current interest rate that is being applied.
  • Mortgage Term – The length of time to pay off the original mortgage. This is most commonly 15 or 30 years.
  • Year Started – The year you started your original mortgage. This is used to determine if you will save any money on interest in the long run.

Refinanced Mortgage –

  • Interest Rate – The interest rate on your new mortgage.
  • Mortgage Term – The length of time to payoff the new mortgage.
  • Equity Cash Out (optional) – If you are drawing cash from your home’s equity during refinancing, put that amount here.
  • Closing Costs – Closing costs cover the fees associated with refinancing a mortgage. A cursory search shows the average refinancing costs in the US are ~$7,000. This will depend on several factors, and you will want to speak with your lender to get an exact amount.


  • Reduction in Monthly Payment – This is how much lower your monthly payment will be every month. If the number is negative, this indicates your monthly payment will actually increase.
  • Total Interest Savings – This is the amount of money you will save overall – through the length of the new mortgage – on interest. Closing Costs are deducted from this amount. Remember, even if your monthly payment decreases, you might not always save money in the long run. If this number is negative, that indicates it will ultimately cost you more to refinance.