Refinance calculator
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Refinancing means replacing your old mortgage with a new one, often to secure better terms or access your home’s equity. The process is similar to buying a home. You apply with a lender, provide the necessary financial information for review, then go through closing and pay any refinance closing costs (typically 3% to 6% of your loan amount).
See our refinance guide for a detailed step-by-step explanation and our mortgage refinance calculator to estimate savings.
People refinance for several reasons:
- Securing a lower interest rate.
- Paying off the mortgage sooner or lowering monthly payments.
- Switching from an adjustable-rate to a fixed-rate mortgage for payment stability.
- Removing a co-signer from the mortgage, such as after a divorce.
- Taking out cash for major expenses like education or renovations.
Learn more about common reasons to refinance.
The two main options are:
- Rate and term refinance: Lower your interest rate, reduce monthly payments or secure a fixed-rate mortgage.
- Cash-out refinance: Use your home’s equity for other financial needs, such as debt consolidation or home improvements.
You can explore more types of refinancing that may fit your financial goals.
Refinancing may make sense if interest rates have dropped or your home’s value has increased. However, it may not be ideal if you can’t afford closing costs, if you plan to move soon or your current mortgage has a prepayment penalty.
For more on timing and requirements, see how soon you can refinance.
- Appraisals: Most refinances require a home appraisal, though exceptions exist.
- Debt consolidation: Cash-out refinancing can help consolidate high-interest debt, potentially lowering your overall payments.
Use our mortgage refinance calculator to estimate your potential savings.
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