Refinance savings calculator

Refinancing means you get a new loan for your current home. This new mortgage pays off your current loan, and you become subject to the terms of the new loan.

To refinance your home, talk to your mortgage provider about the refinancing options you qualify for. If you've improved your credit over time, there’s a good chance you may qualify for a mortgage with more favorable terms. The qualifications for refinancing a mortgage are similar to the requirements of obtaining your first mortgage. Your lender considers your credit history and score, income history and current and past employment and other debt obligations you have. Information about your current loan is also considered, including the payment history on your current loan, the home's current loan, and the equity in the home.

Generally, the goal is to save money, either immediately or in the future. Here are the most common reasons homeowners decide to refinance:

• Lower monthly payments. If your credit has improved or interest rates have changed, a similar loan term could provide lower monthly payments. Lengthening the term of your loan is also an option if you're having difficulty making ends meet.
• More favorable mortgage terms. With improved credit, you may be able to change from an adjustable interest rate to a fixed interest rate. If economic changes make your situation more favorable, you could get a lower interest rate overall.
• Shorten the life of your loan. Aside from changing your interest rate, refinancing your mortgage can allow you to change the term of your loan. You could trade in a 30-year mortgage for a 15-year mortgage.
• Take advantage of home equity. To access your home's equity, you can see if you qualify for a cash-out refinance. This option allows you to refinance your home for a larger sum and receive the difference in cash.

Generally speaking, one or more of the following conditions needs to be present before you should consider refinancing your mortgage:

• Mortgage interest rates are falling 
• Your home has significantly appreciated in market value 
• You've been making payments on your original 30-year mortgage for less than ten years

Refinancing may not be ideal if the following situations apply to you.

• Your financial situation has worsened. If your credit score is lower than it was when you obtained your original mortgage, it's unlikely that a refinance loan will provide improved terms. A poor credit rating often leads to higher interest rates and payments.
• You can't afford closing costs. Generally, refinancing only saves you money if the savings from lowering your monthly payments outweigh the closing costs of refinancing. If you're paying out more in closing costs, you won't actually benefit from refinancing. Find out how much it will cost you to refinance with our Refinancing Costs Calculator: What would my refinancing costs be?
• You're planning to move soon. Refinancing means taking out a new mortgage loan. This provides you with little to no benefits if you plan to sell your home before you have time to recoup the costs from refinancing.
• Your existing mortgage includes a prepayment penalty. If you have to pay off a fee when you pay off your mortgage, your breakeven period will take significantly longer. Since a prepayment penalty needs to be paid off immediately, you may not even be able to afford to refinance. This option allows you to refinance your home for a larger sum and receive the difference in cash.

Yes, if you qualify. Chase offers a variety of options that allow you to tap into your home's equity and take cash out. Consult your Home Lending Advisor for cash-out refinancing options for you.

Cash-out refinancing can help homeowners who want to consolidate high-interest debt. Because your mortgage interest rate is likely to be lower than rates on credit cards or other types of bank loans, consolidating debt may reduce your overall monthly debt payments.

Yes, in most cases. However, depending on the circumstances, an appraisal may not be required.