Refinance Calculator: Estimate Monthly Mortgage Payments

Our Refinance Calculator provides an estimate of potential savings (or losses) from refinancing. Refinancing a mortgage focuses on savings through lower rates, reduced monthly payments, shorter terms, or eliminating mortgage insurance. Before applying with lenders, use this tool to determine if refinancing your existing home loan is beneficial.

What is mortgage refinancing?

Mortgage refinancing replaces your current home loan with a new one. The process involves reviewing your credit, income, and employment history. An automated underwriting system determines eligibility and whether an appraisal is needed. The new loan pays off your existing loan and closing costs, typically with no out-of-pocket expenses. Most people refinance to lock in a lower interest rate and monthly payment or shorten the loan term. A cash-out refinance lets you access home equity—the difference between what you owe and the home’s current value—up to 80% of the home’s total value for most loan types. Ideally, you’ll secure a lower interest rate, using the cash to pay off high-interest debt or fund home improvements.

How much does it cost to refinance?

While refinancing can save money long-term, you’ll face fees similar to those from your initial home purchase, including:

• Lender fees: underwriting and points to buy down the rate
• Third-party fees: appraisal (if required), document recording, and credit report
• Title search and recording fee
• New escrow account (if applicable)

Closing costs vary based on loan amount, credit score, debt-to-income ratio, interest rate, and loan program. Shopping for a lender with competitive rates and low fees is worthwhile. Ideally, choose a lender offering no closing costs and a rate tailored to your ownership timeline for maximum savings.

What is a break-even point on a mortgage refinance?

Calculating your break-even point is key to deciding if refinancing is worth it. Divide the total closing costs by your monthly savings to find the years needed to recoup costs. Refinancing makes sense if you’ll stay in your home beyond this point; otherwise, you might lose money. For short-term ownership, a no-closing-cost option may be better.

How long do you plan to keep your home?

Before using our refinance calculator, consider your ownership timeline. Rather than chasing the lowest rate, seek the cheapest financing for your remaining term. An experienced lender can compare options to find the best fit for your situation.

What are common reasons to refinance a mortgage?

There are many reasons to refinance. Here are the most common:

• Lower interest rate and monthly payments: If current rates are below your existing rate, or your credit score or debt-to-income ratio has improved, you may qualify for a better rate.
• Switch from adjustable-rate to fixed-rate: Borrowers with an ARM often refinance to a stable fixed-rate mortgage.
• Access home equity: A cash-out refinance replaces your mortgage with a larger loan, providing cash from your equity.
• Remove a borrower: After a divorce or co-signer situation, refinancing removes someone from the mortgage, requiring the remaining borrower to qualify independently.
• Eliminate mortgage insurance: Refinancing can remove PMI if you have 20% equity, or switch an FHA loan with lifetime MIP to a conventional loan.

What are the next steps to refinance?

Once refinancing makes financial sense, apply with a lender. We guarantee closing costs in writing, detailing all loan terms. Review the Loan Estimate for a clear cost breakdown. We’re here to support your refinance goals.

Where do I find more information on refinancing a mortgage?

Explore our mortgage refinance page for calculators, articles, and tools to guide your journey. Use our Refinance Calculator to assess savings, then apply online or contact a mortgage advisor when ready.

Are you ready to apply after using our refinance calculator?

Since 1997, Metropolitan Mortgage has helped homeowners in Kansas, Missouri, and the Midwest secure mortgage products. As a family-run business, we offer diverse programs to make homeownership dreams a reality. Contact us with questions about applying for a mortgage.