Refinance Calculator

Find the Right Refinance Option

Calculate your new monthly payment, interest rate, and potential savings across a number of different loan types.

How it Works

  • Enter your current loan amount, home value, and years left on your current mortgage
  • Next, enter your current rate so we can forecast what types of refinance loans make sense
  • Based on your inputs, we will show you if and how much you could save by refinancing your current loan
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The refinance calculator results will show here once you complete the questions above.

Calculating

Loan Type
New Monthly Payment
Monthly Savings
Interest Savings
Cash Out
APR
(Rate)
Term
Lower Payment
Lower Rate
Pay Off Faster
Pay Less Interest
30 YR FIXED
15 YR FIXED
5/1 YR ARM
CASH OUT
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$
$
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$0
$0
$0
$
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30 Years
15 Years
30 Years
30 Years

The refinance calculator results will show here once you complete the questions above.

Pros and Cons of the Different Loan Types

15 Year Fixed Rate

  • Lower interest rate
  • Lower amount to pay back
  • Home paid off in only 15 years
  • Higher monthly payment

30 Year Fixed Rate

  • Lower monthly payment
  • Higher interest rate
  • In debt for 15 more years
  • Higher amount to pay back

5 Year Adjustable Rate

  • Lower monthly payment for the first five years
  • Perfect if your living situation isn’t permanent
  • Monthly payments after first 5 years will be unpredictable (no fixed interest rate)

Refinance Calculator FAQ’s

Many people ask the question: “Should I refinance?”  Usually triggered by low rates, consumers often begin to wonder if this is the time they should lock in a lower rate in order to save money over the long haul by paying off their mortgage sooner, lowering their payment each month or getting cash out to fund a new project.  The LowerMyBills mortgage calculator can give you a helpful estimate of your potential savings.  Here is the information that you need to enter into the calculator and why we need this for the calculation.

Mortgage Refinance Calculation Inputs  

Mortgage Balance and Home Value

By entering your current mortgage balance and home value, we can calculate your current loan amount.   The loan balance can be lower or higher if you’d like to pay down the principal or take cash out.

Credit Score

Based on your self-reported credit, lenders will offer different terms based on the risk associated with the credit.  Typically, if you have Good to Excellent credit, you will be able to get better terms than someone with lower credit.

Interest Rate

Your current interest rate will be used in the calculation to weigh against today’s interest rate which uses the average 30 year fixed rate.

Monthly Payment

This is the amount you pay each month in your mortgage bills given the loan amount, loan term (time chosen to pay off your loan) and interest rate that you locked in.

Zip Code

Different lenders operate in different states so your zip code is used to filter the lenders that would potentially be able to help you with the mortgage process.

Mortgage Refinance Calculation Outputs 

Loan Type

This is the type of loan that you could choose from.  These come in the form of 30 year fixed, 15 year fixed, 5/1 year ARM and Cash Out Refinancing.

New Monthly Payment

This will be your estimated new mortgage payment if you refinanced at the new rate

Monthly Savings

This considers how much you could save each month by refinancing.  The formula compares your current monthly payment subtracted by your new monthly payment.

Term

Your term is the length of time you choose to pay off your loan (e.g., 30 years, 20 years, 15 years, etc.). Enter the term of your current loan, then choose a new term for your new loan.

Refinance Fees

Like all home loans, a refinance loan requires closing costs to pay for things like the loan origination fee, title and appraisal. You can roll the fees into the new loan under “Advanced.”

Cash Out

For a Cash Out Refinance, this shows the amount that you could take out of your house due to the equity you’ve built up.

APR

This shows your new estimated APR and mortgage rates that you could potentially get with each refinance option you choose.

Term

This shows the number of years that you will have to pay off the loan under each loan option.

Lower Payment

This shows you if the loan option will likely achieve your goal of having a lower payment.  If the loan has a checkmark, then it could meet that goal.  An X shows that the loan option will likely not achieve that goal.

Lower Rate

This shows you if the loan option will likely achieve your goal of having a lower rate and ultimately lower overall interest payments.  If the loan has a checkmark, then it could meet that goal.  An X shows that the loan option will likely not achieve that goal.

Pay Less Interest

This shows you if the loan option will likely achieve your goal of paying less interest over the course of the loan.  If the loan has a checkmark, then it could meet that goal.  An X shows that the loan option will likely not achieve that goal.

Common Reasons to Refinance Your Mortgage

Trying to decide if you should refinance? Here’s a look at some of the most common reasons on why you might consider refinancing your mortgage.

Lower your interest rate

This is the most popular reason that one would refinance their home loan.  If you are a home owner with a higher interest rate than the average current rate, then you may benefit from a refinance, especially if you are refinancing to a loan with less years.  The math is simple: If rates are lower than when you got your initial loan, you could reduce your monthly mortgage payments and/or save thousands of dollars in interest over the life of your loan with lenders.

Switch Your Mortgage Type

You can choose different loan types when you refinance in order to benefit from what that loan offers.   One example is that if you have an adjustable-rate mortgage and the rate is starting to increase, you could change it to a fixed rate mortgage so you don’t incur the cost of interest rates rising.   Another example is that if you have an FHA loan and you want to stop paying mortgage insurance, you could change into a conventional loan that doesn’t require mortgage insurance.

Consolidate High-Interest Debt

If you have a lot of high interest debt either through loans or credit cards and have equity in your home, it may benefit you to look at a cash out refinance.  Taking cash out of your house when refinancing could help improve your liquidity by allowing you to pay off your high interest debt and save you money in the long term.

Fund Home Improvements

Even if you don’t have a lot of outstanding debt, a cash out refinance could be a great option if you’d like to use the extra money to remodel your current house.  You can refinance your current home loan for more than you currently own and use that extra money for remodeling your kitchen, adding an extra bedroom or anything else that could potentially increase the value of your home.

Eliminate Mortgage Insurance

If you have an FHA loan, you could refinance to help lower your monthly costs.  FHA loans come with mandatory mortgage insurance.  After you pay an upfront premium of 1.75% of the loan amount, a lot of borrowers continue to pay an annual mortgage insurance premium of 0.85% of the loan amount for the remainder of the 30 year term that can’t be cancelled.  To eliminate PMI , homeowners can refinance into a conventional mortgage.  This can be done once a consumer has 20% equity in their home.

Pay Off Your Loan Faster

Finally, a lot of consumers look to pay off their loan faster.  While this may mean a higher monthly payment, over the lifetime of the loan you’ll likely pay less in interest due to making fewer payments and the fact that shorter term loans typically have lower interest rates than longer term loans.