Refinance calculator

Refinancing will reduce your monthly mortgage payment by $640.
By refinancing, you’ll save $46,790 in the first 5 years by paying less interest.
Total savings
$46,790
5 years

Next steps

See if you can get a better rate.

Monthly payment savings breakdown

CURRENT
$1,633

-
NEW
$994

=
SAVINGS
+$640

Through year 5

Tax deductions on interest paid have not been factored in
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Curious what your home is really worth?
NerdWallet lets you know what your home is worth and tracks its value for you. NerdWallet will also notify you when it thinks you may save by refinancing.

Why should you consider a mortgage refinance?

In many instances, you should refinance to save money on your home mortgage. You’re a good candidate to refinance if you’re planning to stay in your home for a while and are refinancing at a lower interest rate, switching off an adjustable-rate mortgage, or looking to eliminate private mortgage insurance.

The top reasons to refinance are:

  1. Get a lower interest rate: Lowering your mortgage rate can reduce your monthly payment if the repayment term (duration) remains the same. However, keep in mind that a refinance can carry fees ranging from 2% to 5% of the loan balance due.

    Mortgage refinancing for a lower rate can make a lot of sense, especially if your credit score has improved. In that instance, you might qualify for a significantly lower mortgage rate today. Check your credit score and history before you go any further.

    Nerd Tip: Rather than simply focusing on reducing your monthly payment, it’s wiser to refinance when you can save money with a lower interest rate, without extending the loan term.


  2. Switch from an adjustable-rate mortgage to a fixed rate: An adjustable-rate mortgage typically comes with an initial period of a steady interest rate then resets to a floating rate for the rest of the loan. It makes sense to use an ARM if you know you’ll live in a home for only a few years; you could save a lot of money with a lower interest rate in the interim.

    Converting to a fixed mortgage from an ARM is especially useful if you plan to stay in your home long-term. For example, if you have a 5/1 ARM, you could complete a refinance by the end of the fifth year and lock in a steady rate with a 30-year fixed-rate mortgage.


  3. Eliminate private mortgage insurance: If you buy a home with less than 20% down, you typically are required to pay private mortgage insurance, or PMI, which protects the lender in case you default on the loan.

    Annual PMI premiums can cost between 0.5% and 1.5% of the mortgage. Sometimes, homeowners are able to cancel mortgage insurance once the balance on the mortgage falls below 80% of the value of the home. However, loans insured by the Federal Housing Administration require mortgage insurance for the entire life of the loan. Read more about FHA loans.

Where can I find out more about the refinance process?

Once you’ve decided that refinancing makes sense for you, learn more about how to refinance your mortgage. Also, explore how a cash-out refinance works and the hidden fees to watch out for when refinancing your loan.