What to enter, and where to find it
- Current balance and rate. On your latest monthly mortgage statement.
- Remaining term. The months left on your current loan, not its original term. This is the input people most often get wrong.
- New rate and term. From a Loan Estimate, the standard three-page form lenders must give you within three business days of an application. The CFPB publishes an annotated sample explaining each line.
- Closing costs. Sections A through I of the Loan Estimate, including any points. If you'll roll them into the loan, add them to the new balance rather than treating them as zero.
Advertised rates assume a particular credit score, loan amount and equity. Your own quote can differ, which is why a calculator run on a quote is more useful than one run on a headline.
How to read the break-even
Break-even in months = total refinance costs ÷ monthly saving. If you plan to keep the loan well beyond that point, the refinance can pay for itself. If you may sell, move or refinance again sooner, it may not.
Our guide to the cost to refinance a mortgage explains each fee that goes into the top half of that equation.
Mistakes that make a refinance look better than it is
- Comparing a new 30-year term with the original term of a loan you've paid for years: the monthly saving partly comes from stretching the debt out again
- Leaving closing costs out, or rolling them in without adding them to the balance
- Comparing principal and interest on one side with a full escrow payment on the other
- Ignoring mortgage insurance, which can be added, removed or changed by a refinance
- Using an advertised rate instead of a quote priced for your file
Monthly saving vs. total cost
A good refinance usually improves at least one of three things without hurting the others too much: the monthly payment, the total interest paid over the time you keep the loan, or the loan's risk, for example moving from an adjustable to a fixed rate. If the calculator shows a lower payment but more total interest, decide whether the cash-flow relief is worth that trade. A shorter term, or extra principal payments after you refinance, can close the gap.
Which calculator fits your goal
- Lower rate or different term. Use the refinance calculator.
- Taking equity out. Use the cash-out refinance calculator, and compare it with a HELOC.
- You already have an FHA loan. Read our FHA streamline refinance guide first; reduced paperwork can change the cost side.
- You don't want to pay costs up front. See how a no-closing-cost refinance works.
Before you apply
8Twelve is a mortgage broker, not a lender. A calculator can show the math; we can show what lenders in our network would actually offer on your file, with the costs on a Loan Estimate, and we'll tell you if the break-even says not to refinance.
