It was a mixed bag for home affordability in early 2024. See the income you need to buy a median-priced home in the top 50 metro areas for details.

It was a mixed bag for home affordability in early 2024. See the income you need to buy a median-priced home in the top 50 metro areas for details.

Should I Prepay My Mortgage or Refinance? Calculator

When does paying more equal paying less? When you prepay your mortgage.

You probably already know that sending more money than required each month (prepaying) saves you interest cost over the long haul. But did you know that prepaying can effectively replace the need to refinance... or can make your refinance even more valuable? Just a few extra dollars per month can bring the same savings as a refinance can, lowering the effective rate you pay without all the effort and hassle.

This unique Prepayment::Refinance (prepayment is equivalent to refinance) calculator (PreFiSM) will show you the effective interest rate you'll achieve when you prepay your loan.

Many homeowners refinance to save money; some do it to rebuild lost equity. However, if you have a small loan amount, relatively few years left on your loan or one where only a small break in rate is available, it may not be cost-effective for you to refinance. Or, you may be among many borrowers who can afford to pay more on their loans but cannot refinance due to today's stiffer underwriting standards.

So, if you can prepay your loan but can't refi, you can PreFi your mortgage and get virtually the same savings!

Also, if you have a specific interest rate in mind -- that you would like to prepay your mortgage as though it has a 2% interest rate, for example -- you'll want to also check out HSH's LowerRateSM Prepayment Calculator!

Prepaying your mortgage can bring the same savings as refinancing

1 Interest details

Please enter interest rate greater than 0

2 Loan details

Please enter loan amount

Please enter loan term

Prepayment date cannot be prior to inital loan date


Please enter current loan balance

Please enter principal and interest payment

3 Prepayment details

Please enter prepayment amount greater than 0

Please select prepayment start date

As of -
You have made…
monthly payments and
have - months remaining.
You have already paid…
in interest out of a scheduled
- total interest due for your loan.
Without Prepayment...
Your loan term remaining is
- months (- years)
You have - in scheduled interest yet to pay.
With Prepayment...
Your remaining loan term will be - months (- years) and you will pay - in interest.
Savings from prepaying your loan: -
A - month loan with - in interest to be paid would carry an interest rate of -.
- is the effective interest rate you achieve by prepaying your mortgage at - per month.
Think refinancing will bring greater savings?
If you want to refinance your remaining - and pay the same - in total interest cost, you'll need to refinance to a new term below with the interest rate not higher than shown for each.
30-year term     -
25-year term     -
20-year term     -
Refinancing has both upfront and long-term costs to consider. Is an actual refinance better?

Is an actual refinance better?

It may be worth considering a refinance, if you can qualify. Aside from savings, refinancing may bring improvements in cash flow, too, freeing up additional money (you could refinance, then PreFi, and lower your effective rate even more!)

Of course, refinancing costs money, either out of pocket or traded off into the interest rate. If you have the cash for closing costs but can't qualify for a refinance, use those funds to PreFi your mortgage by sending in a little extra each month, or even all at once. We estimate closing costs at about 2% of the loan amount, but if costs for your situation are higher, plug in in the dollar figure and we'll tell you the interest rate that your monthly or lump sum PreFi will buy you.

Refinancing typically costs of the loan amount or $ for your loan balance . ( Recalculate )

If you broke this cost into the remaining payments ( per month), you would produce total interest costs equivalent to refinancing to a year loan at a rate of . Alternately, you could simply send the money in a lump-sum of which would produce a rate of over years.

Remember: if you refinance to a new 30-year term, you are re-starting the "amortization clock" all over again. In your planning, you'll need to include what you've already spent in interest on your existing loan to determine if you end up with any actual savings.

After your year period is up, you would end with a balance of , paying in interest.
Compared to a balance of and in interest without prepaying (saving in interest) and pay an equivalent year rate of

If you're got a specific interest rate target in mind, try our LowerRate prepayment calculator, too!

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