Refinance Calculator | Calculate Your Mortgage Refinance Options

Whether you have 15, 20, or 30-year mortgage, having the right mortgage rates and terms is crucial to keeping your payments affordable over the long-term.

Unfortunately, finding the best rates and terms is not always an easy task. In fact, the New York Times reported that last year mortgage rates increased by 50 basis points.

You may find that you are eligible for better rates and terms through refinancing your mortgage, making it easier to pay down your balance at a faster pace. Or, conversely, you may want to explore refinancing options to extend your terms, making your monthly payments more manageable in the process.

No matter what your financial goals are, you can use a refinance mortgage calculator to explore your refinancing options.

What is Mortgage Refinancing? (Mortgage Refinance Calculator)

When you refinance a mortgage, your new lender pays the old mortgage balance off and gives you a new mortgage.

One of the most popular reasons that homeowners choose to refinance is because they are looking for more favorable mortgage rates. With the right lender—and with the right requirements—mortgage refinancing can be an effective way to reduce monthly payments.

Another popular reason for refinancing could be needing shorter or longer terms. Homeowners that want to pay off their home quicker may refinance with shorter terms, while homeowners that need additional time could refinance for longer terms.

Mortgage refinancing is a great tool to apply towards a variety of financial goals, and some of the best lenders provide lower rates and better terms to fit a variety of needs.

Mortgage Refinance Calculator: Other Reasons to Refinance

While lower interest rates and more favorable terms are still the most popular reasons for refinancing, there are a few other circumstances that may prompt a homeowner to begin the refinance process.

Improved Credit Score

Getting the best refinance rates often depends on credit score, so if you find that your score has jumped up, you might want to explore your refinancing options.

According to myFICO, refinancing with a credit range of 760-850 can make borrowers eligible for rates of 3.5 percent.

Compared to 5.1 percent rates for credit scores between 620-639, borrowers could potentially be looking at savings of 1.5 percent or more.

Switch from Adjustable to Fixed

If you’re worried that mortgage rates are on the rise, you can use mortgage refinancing to switch from an adjustable rate mortgage (ARM) to a fixed rate mortgage.

Approaching a mortgage refinance from this angle does come with its own sort of risk—how do you know that mortgage rates won’t start dropping down again?

With interest rates steadily increasing over the past few years, Berger suggests that refinancing from an ARM to a fixed makes the most financial sense.

As he puts it, “For me, I wouldn’t bet on rates staying low. If I financed a property with an ARM, I’d be looking to refinance fast.”

Mortgage Refinance Calculator: Costs of Refinancing

Refinancing your mortgage can certainly save you money over the long-run, but there will still be associated costs to consider in the short-term. According to SmartAsset, these costs may include:

  • Application fees ($75-$500)
  • Appraisal ($300-$1,000)
  • Loan origination fee (typically 1 percent of the mortgage amount)

Depending on the lender you choose, you also may have to pay a fee for the lender to review the refinance application, which could cost between $200-$400.

It’s also a good idea to make sure that you understand the lender’s policies for prepayments, since some lenders do charge penalties for paying a mortgage off early.

With these additional costs, it’s important to examine your personal finances to make sure that refinancing makes sense for you—not only for long-term expenses, but also for short-term costs.

Additional Considerations

No matter what financial goal you are working towards, it’s important to examine every option before you begin the mortgage refinancing process.

This means exploring rates and terms from as many lenders as you can. It also means that you will have to take a close look at your finances to ensure that refinancing will provide a financial advantage.

Use the refinancing calculators listed below as resources to begin exploring your options and determine whether refinancing is the best decision to help you reach your financial goals:

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