Refinance a mortgage

Compare your mortgage with a refinance.

Compare the proposed refinance with the mortgage you already have. Review the payment, closing costs, new balance, term, total interest, and recovery time before you replace the current loan.

Start prequalification Read the guide

Begin with the outcome

Set your refinance goal.

A lower rate is only one possible result. Decide what the new loan needs to improve before comparing offers.

01Lower the paymentConfirm whether the change comes from the rate, balance, term, or mortgage insurance.

02Pay off the loan soonerCompare the higher payment with the earlier payoff and projected interest.

03Change the loan structureReview fixed or adjustable terms and how mortgage insurance may change.

04Access home equityKeep the new loan balance, cash received, closing costs, and remaining equity visible.

Use the same facts for both loans

Put the loans side by side.

Write down the current mortgage and the proposed refinance using the same property costs and the same future date.

CompareCurrent mortgageProposed refinanceDecision check

PaymentCurrent mortgagePrincipal, interest, and mortgage insurance todayProposed refinanceThe new payment using the same tax and insurance assumptionsDecision checkIdentify exactly why the payment changes.

BalanceCurrent mortgageCurrent payoff amountProposed refinanceNew loan amount after financed costs or cash outDecision checkSee how much debt the refinance adds or removes.

TermCurrent mortgageMonths remaining on the current loanProposed refinanceThe complete new repayment termDecision checkConfirm whether the payoff timeline restarts.

Closing costsCurrent mortgageNo new transaction costProposed refinanceLender, appraisal, title, settlement, and recording costsDecision checkCalculate how long the monthly savings take to recover the cost.

Your timelineCurrent mortgageWhen you expect to sell or pay off the homeProposed refinanceBalance and interest at that same future dateDecision checkMake sure the benefit arrives while you still have the loan.

Refinance calculator

Compare your current and proposed loans.Review the payment, closing costs, cash amount, and estimated recovery time.Compare my loans

Measure the cost

Calculate the break even point.

Recovery time is a useful starting point. It does not show the effect of a larger balance, a restarted term, or selling the home sooner than planned.

Separate lender and third party costs from prepaid items.
Show which costs are paid now and which are added to the loan.
Compare the balance and interest over the time you expect to keep the loan.

Relevant refinance costs÷Expected monthly savings=Estimated recovery months

If the goal includes cash

Compare equity options.

Compare how each option affects the first mortgage, monthly payment, fees, lien position, and repayment timeline.

Cash out refinanceReplace the first mortgage with a larger new loan.

HELOCAdd a reusable line with its own rate and repayment rules.

Home equity loanAdd a separate lump sum loan and payment.

Compare all three structures

Prepare the file

Get the refinance details ready.

Current loanPayoff amount, rate, payment, remaining term, mortgage insurance, and escrow
BorrowerCredit, income, employment, assets, debts, and the source of closing funds
PropertyValue, equity, occupancy, insurance, title, and existing liens
TimingRate lock, payoff, escrow funding, and the expected closing date

Continue making payments on the existing mortgage until the servicer confirms the payoff and transfer process.

Before signing

Review the final refinance.

Compare the Closing Disclosure with the latest Loan Estimate.Confirm the final payoff, new balance, payment, and cash due or received.Review the new term and the date the first payment is due.Keep enough cash available for escrow timing and other household needs.

Open the refinance basics guide

Questions worth asking

Pressure-test the decision.

Does a lower refinance payment always save money?

No. The payment can fall because the term is extended or costs are added to the balance. Compare total cost, recovery time, balance, and the period you expect to keep the loan.

Can I count on refinancing again later?

No. Future rates, property value, equity, income, credit, program rules, and lender requirements can change.

Next steps