Refinance Calculator

Estimate your savings with our easy-to-use refinance calculator.

Mortgage Refinance Loan Types

The type of loan you choose for your refinance will affect your interest rate and your monthly payment, so it’s important to choose wisely. Here’s a look at details of some common refinance loan types:
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Fixed rate loans

    Often used by
    Borrowers who want the stability of a payment amount that will never change
    Length of term
    30 or 15 years are the most common
    Interest rate
    Fixed rate for the life of the loan
    Monthly payment
    Never changes for life of the loan
    Additional details
    30-year fixed loan will have lower monthly payments than a 15-year, but a 15-year loan may help you pay off the loan quicker
Adjustable rate mortgage (ARM)

    Often used by
    Borrowers who might sell after the length of the fixed period, or are comfortable knowing their payments can change
    Length of term
    Typically last for 30 years
    Interest rate
    Fixed rate for 3, 5, 7, or 10 years, then can change every year thereafter
    Monthly payment
    Can change after the fixed period ends
    Additional details
    After fixed period ends, interest rate can change annually based on the index value at that time
FHA Streamline Refinance

    Often used by
    Borrowers with an existing FHA loan on their primary residence
    Length of term
    Typically last for 15 - 30 years
    Interest rate
    Borrowers can choose a fixed or adjustable rate
    Monthly payment
    Can change only for an adjustable rate FHA loan
    Additional details
    Called “streamline” because it allows borrowers to refinance quickly and often without an appraisal
VA IRRRL

    Often used by
    Veterans, active military, and military families with an existing VA loan
    Length of term
    Typically last for 15 - 30 years
    Interest rate
    Borrowers can choose a fixed or adjustable rate
    Monthly payment
    Can change only for an adjustable rate VA loan
    Additional details
    An IRRRL may be done with "no money out of pocket" by including all costs in the new loan
Fixed rate loansAdjustable rate mortgage (ARM)FHA Streamline RefinanceVA IRRRL
Often used byBorrowers who want the stability of a payment amount that will never changeBorrowers who might sell after the length of the fixed period, or are comfortable knowing their payments can changeBorrowers with an existing FHA loan on their primary residenceVeterans, active military, and military families with an existing VA loan
Length of term30 or 15 years are the most commonTypically last for 30 yearsTypically last for 15 - 30 yearsTypically last for 15 - 30 years
Interest rateFixed rate for the life of the loanFixed rate for 3, 5, 7, or 10 years, then can change every year thereafterBorrowers can choose a fixed or adjustable rateBorrowers can choose a fixed or adjustable rate
Monthly paymentNever changes for life of the loanCan change after the fixed period endsCan change only for an adjustable rate FHA loanCan change only for an adjustable rate VA loan
Additional details30-year fixed loan will have lower monthly payments than a 15-year, but a 15-year loan may help you pay off the loan quickerAfter fixed period ends, interest rate can change annually based on the index value at that timeCalled “streamline” because it allows borrowers to refinance quickly and often without an appraisalAn IRRRL may be done with "no money out of pocket" by including all costs in the new loan

Why Refinance Your Home Loan?

Low interest rates aren’t the only reason to refinance. Here’s a look at the benefits of refinancing and why you might choose to refinance your home loan.
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Lower your monthly payments

Refinancing to a lower interest rate can lead to significant savings on your monthly mortgage payments. The downside is that less of your payment will initially go towards principal, thanks to amortization. That’s why many borrowers opt to pay extra each month to pay down the principal and get out of debt faster.

Save money on interest

By refinancing to a lower interest rate, you could potentially save thousands of dollars in interest paid over the life of the loan. Use our refinance calculator to see what your lifetime savings could be. Just keep in mind that there are fees associated with a refinance, so be sure to look at the breakeven point when estimating your overall savings.

Pay off your loan faster

If you can afford a higher monthly payment, replacing 30-year fixed rate mortgage with a 15-year fixed rate loan during your refinance can help you pay off your loan faster and get out of debt sooner. Another benefit of a 15-year fixed loan is that you’ll likely get a lower refinance rate than if you refinanced with a 30-year loan.

Fund large expenses

If you have enough equity in your home, a cash-out refinance could help you use your equity to pay for large expenses like college tuition, home renovations or paying off other debts with higher interest. A cash-out refinance is when you refinance your mortgage for an amount higher than your current loan balance, and keep the difference.

Change loan types

Refinancing is great opportunity to change your loan type. For example, you could refinance from an ARM to a fixed rate mortgage for more predictable payments, to a loan with a shorter term to pay it off faster or from an FHA loan to a conventional loan. Be sure to review the benefits of each loan type with your refinance lender.

Get rid of mortgage insurance

If you currently have an FHA loan, you’re probably required to pay mortgage insurance for the life of the loan. But once you’ve built up 20% equity in your home, you can get rid of the mortgage insurance premiums by refinancing to a conventional loan. Just make sure the PMI savings outweigh the cost of the mortgage refinance.

Mortgage Refinance Resources

Interested in refinancing your mortgage? In addition to our refinance calculator, these easy-to-use mortgage refinance resources can help simplify the process of refinancing your home loan.