How our calculators work

Monthly payment and amortization

For a fully amortized fixed-rate loan:

M = P · (r·(1+r)^n) / ((1+r)^n − 1)

where P is principal, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is total payments in months. Edge case: if r = 0, monthly payment is P / n.

Remaining balance after k payments uses the closed-form:

B_k = P · (1+r)^k − M · ((1+r)^k − 1) / r

The amortization comparison chart plots this balance month by month.

PMI (private mortgage insurance)

PMI applies to conventional loans with LTV above 80%, and is automatically removed at 78% LTV under the U.S. Homeowners Protection Act. The calculator uses industry-typical rate bands:

• 80–85% LTV → 0.50% annual base rate
• 85–90% LTV → 0.70%
• 90–95% LTV → 0.95%
• Above 95% LTV → 1.25%

The base rate is multiplied by a credit-score adjustment:

• FICO 760+ → 0.65× base
• 740–759 → 0.80×
• 720–739 → 1.00×
• 700–719 → 1.20×
• 680–699 → 1.45×
• 660–679 → 1.75×
• Below 660 → 2.10×

This is a model of industry pricing, not a quote. Actual PMI rates depend on the specific MI provider (MGIC, Radian, Essent, Arch, National MI, Genworth) and on additional risk factors (debt-to-income, property type, occupancy). Treat our PMI estimate as a starting point — your lender's Loan Estimate has the authoritative number.

FHA MIP

FHA loans carry two MIP components:

• Upfront MIP (UFMIP): 1.75% of the base loan amount, financed into the new loan balance.
• Monthly MIP: annual rate divided by 12, set per HUD Mortgagee Letter 2023-05 by term, LTV, and whether the base loan exceeds the national conforming loan limit ($832,750 baseline for 2026).

Standard (base loan ≤ national CLL):

• >15-yr term, LTV ≤ 95% → 0.50% annual
• >15-yr term, LTV > 95% → 0.55%
• ≤15-yr term, LTV ≤ 90% → 0.15%
• ≤15-yr term, LTV > 90% → 0.40%

High-balance (base loan > national CLL):

• >15-yr term, LTV ≤ 95% → 0.70%
• >15-yr term, LTV > 95% → 0.75%
• ≤15-yr term, LTV ≤ 78% → 0.15%
• ≤15-yr term, 78% < LTV ≤ 90% → 0.40%
• ≤15-yr term, LTV > 90% → 0.65%

FHA streamline / simple refinance carve-out (loan endorsed on or before May 31, 2009): UFMIP 0.01% and annual MIP 0.55% regardless of term and LTV. Enable the toggle in the FHA section of the calculator if this applies.

Source: HUD Mortgagee Letter 2023-05. HUD periodically adjusts these — we re-verify quarterly. The high-balance threshold is tied to the FHFA conforming loan limit, currently $832,750 for 2026.

VA funding fee

Veterans Affairs funding fee is a one-time charge financed into the loan:

• IRRRL (Interest Rate Reduction Refinance Loan): 0.50% of new loan amount
• Cash-out refinance, first use of VA entitlement: 2.15%
• Cash-out refinance, subsequent use: 3.30%
• Disabled veterans with a service-connected disability rating: exempt — turn on “I am exempt from the VA funding fee” and the fee is removed

Source: U.S. Department of Veterans Affairs, VA funding fee schedule.

USDA guarantee fee

A USDA guaranteed loan carries a 1% upfront guarantee fee, financed into the loan, and an annual fee of 0.35% paid monthly. The refinance calculator computes the annual fee on the new loan amount; the actual fee is recalculated on the balance each year. Source: USDA Rural Development, Single Family Housing Guaranteed Loan Program.

Closing costs assembly

The closing-cost line items below are HearthLoan modeled defaults — not market averages and not a quote. Origination, appraisal, attorney, title, and credit fees vary materially by lender, vendor, and county; Freddie Mac's consumer materials describe total refinance closing costs as typically 3%–6% of loan principal. Each line item is overridable:

• Origination fee: 1% of new loan amount (modeled default; lender-set, commonly 0.5%–1.5%)
• Discount points: $0 by default (user input)
• Appraisal: $600 modeled estimate (typical $400–$700)
• Title insurance: state-specific share of the new loan amount (HearthLoan estimate; the model does not use state title rate manuals). California: refinance rate table from policies filed with the California Department of Insurance — $550 up to $250,000, $700 up to $500,000, $850 up to $750,000, $1,000 up to $1,000,000, $1,300 up to $1,500,000, $1,600 up to $2,000,000, plus $700 for each started million above $2,000,000
• Escrow / settlement fee: $450 modeled default. In California, Title Resources publishes a refinance escrow fee of $410 up to $250,000 and $450 above it (rate manual, 2026); the model uses $450 at every loan size. $0 in attorney-required states, where the attorney fee covers the closing
• Tax service fee: $150 modeled default (the lender's fee for tracking property-tax payments)
• Recording fee: state-specific flat amount
• State transfer / deed tax: $0 on a refinance. It is charged on deeds that change ownership; a refinance records a deed of trust that secures a debt
• Mortgage recording tax: state rate × new loan amount, as charged on a refinance with a new lender (NY 0.80%, FL 0.55%, GA 0.30% up to $25,000, VA 0.24%, MN 0.23%, AL 0.15%, TN 0.115% above the first $2,000, OK 0.10%)
• Attorney fee: $850 modeled default in attorney-required states (NY, MA, GA, SC, CT, DE, RI, VT, WV, NC)
• Flood certification: $18 modeled default
• Credit report: $30 modeled default (CFPB notes the typical pre-Loan-Estimate credit fee is < $30)
• Survey, Other: $0 default (user override)

The authoritative source for your actual closing costs is the Loan Estimate (LE) document your lender provides within 3 business days of application, mandated by the Truth in Lending Act / RESPA Integrated Disclosure (TRID) rule.

Breakeven point

Cash-flow breakeven, in months:

breakeven = ⌈ out-of-pocket closing costs / monthly P&I savings ⌉

If closing costs are rolled into the new loan, out-of-pocket costs are zero — but the rolled-in amount raises the new monthly payment, which is already reflected in the calculation.

If monthly P&I doesn't decrease (the new payment is the same or higher), there is no breakeven and the calculator says so.

We use cash-flow breakeven. The other common method, total-cost breakeven, compares lifetime interest savings against closing costs; it does not show when the monthly savings have paid the costs back.

State-specific defaults

The calculator's state selector loads 50 states + D.C. defaults from a calibrated table. Source mapping:

• Effective property tax rate: Tax Foundation "Property Taxes by State and County" series, cross-referenced with U.S. Census ACS Table B25103. The latest Tax Foundation publication uses calendar year 2023 owner-occupied housing values — the most recent ACS data available. Presented in the UI as an estimate, not a forecast.
• Homeowners insurance baseline: HearthLoan modeled estimate for an HO-3 policy on a single-family home, calibrated against NAIC state average premium data (latest published series: 2022) and supplemented with 2026 quote-based market data in higher-risk states (FL, TX, OK, LA, CA wildfire zones). Baselined to $300,000 home value and scaled linearly. Labeled as a modeled estimate in the UI — not an official state average. Real premiums vary widely by construction, deductible, claims history, and proximity to coast.
• Transfer / deed taxes: not charged on a refinance, because no deed changes hands. In California the rule is written in R&T Code §11921.
• Mortgage recording tax: NY Tax Law §253, Fla. Stat. §201.08 and §199.133, O.C.G.A. §48-6-61, Va. Code §58.1-803 and §58.1-814, Minn. Stat. §287.035, Ala. Code §40-22-2, Tenn. Code §67-4-409(b), 68 O.S. §1904; reviewed September 22, 2026. D.C. exempts deeds of trust on homes of up to five units (D.C. Code §42-1102(21)); Kansas repealed its mortgage registration tax from 2019. County and city taxes are not in the state table.
• Florida: a refinance with a new lender pays documentary stamp tax of 0.35% on the note and nonrecurring intangible tax of 0.2% on the mortgage, both on the full loan. With the current lender or its assignee, only new money is taxed (§201.09, §199.145(4)).
• Maryland: county recordation tax is waived up to the old loan's unpaid balance when the original borrower refinances (Tax-Property §12-108(g)), so the calculator shows $0. Cash-out money above that balance is taxed at the county rate.
• Title insurance: a HearthLoan estimate as a share of the loan, the same method in every state except California. California uses the refinance lender-policy rates filed by Stewart, First American and Title Resources (2023–2026); at $200,000, $325,000, $500,000 and $800,000 the table falls within the range of those filings; on a California refinance there is no documentary transfer tax (R&T Code §11921).
• Attorney-state flag: state bar association opinions and case law for states where an attorney is effectively required at closing.

The full state table is maintained in state-data.js and re-verified quarterly. Property-tax rows will be rebuilt when Tax Foundation publishes its next series; insurance baselines will be rebuilt when NAIC publishes a post-2022 state average premiums table.

Refinance approval calculator: how we prepare the HMDA data

The refinance approval calculator does not predict your outcome. It shows the share of 2025 refinance applications that lenders denied among applicants with the same state, loan type, DTI band and LTV band as you. That share comes from public HMDA records, prepared in five steps.

1. Download

Source: FFIEC HMDA Data Browser, 2025 filing year, one CSV per state for the 50 states and D.C. Query filters: loan purpose 31 (refinancing without cash-out; HMDA files cash-out refinances under purpose 32) and action taken 1, 2 or 3 (loan originated; approved but not accepted; denied). Applications withdrawn by the applicant or closed for incompleteness never enter the download, because the lender made no decision on them. Result: 1,408,031 records.

2. Filter

We keep records that look like a typical homeowner refinance:

• first lien (lien_status = 1) on the borrower's principal residence (occupancy_type = 1);
• closed-end loan, not a home equity line (open-end_line_of_credit = 2), and not for a business or commercial purpose;
• property of 1 to 4 units.

After the filter: 840,929 applications, 154,545 of them denied (18.4%). By loan type: conventional 484,172, VA 193,055, FHA 162,924. USDA refinances (778 applications) are not shown: too few to split by state.

3. Band

HMDA publishes DTI as ranges below 36% and above 49%, by whole percent from 36% to 49%, and as a single 50–60% range. We group it into seven bands: under 20, 20–35, 36–42, 43–45, 46–49, 50–60 and over 60. LTV, which HMDA reports as combined LTV across every lien on the home, goes into six bands: up to 60, 60–80, 80–90, 90–95, 95–100 and over 100.

4. Aggregate

For every cell (state × loan type × DTI band × LTV band) we count applications and denials:

denial rate = denied ÷ (originated + approved but not accepted + denied)

The same cube is built for the whole country. Alongside it we keep denial reasons (HMDA records up to four per denied application) by DTI band, and per-state totals by loan type, DTI and LTV for the state tables.

5. Small cells

A cell with fewer than 30 applications is not shown. The calculator falls back to the same cell for the whole country and says so on screen. If the national cell is also under 30, it uses all national applications in your DTI band.

What the data cannot tell you

• No credit scores. The public HMDA file records which scoring model the lender used, not the score itself. Credit history is the third most common denial reason and is invisible here.
• Applications, not people. Someone denied by one lender and approved by another is counted twice.
• Only decided applications. People who heard "no" from a loan officer and never applied are absent from the data.
• Exactly 50% DTI. HMDA puts 50% into the 50–60% range, where denials are high, although Fannie Mae's Desktop Underwriter still accepts 50%. The calculator flags this line.

The prepared dataset is a single JSON file loaded by the calculator page. HMDA data for a filing year is published the following year; we rebuild the file when 2026 data is released. The full method with sources is also on the calculator page: How the calculator works.

Limitations

The refinance calculator does not apply to:

• Adjustable-rate mortgages after the reset point
• Loans with prepayment penalties
• Negative-amortization or interest-only products
• Refinances combined with second-lien subordination
• Cash-out scenarios above state-specific caps (Texas Section 50(a)(6) cap is detected; other state restrictions may apply)

The calculator does not model:

• Mortgage interest tax deduction effects (we don't know your itemization status or marginal rate)
• Opportunity cost of paying closing costs out of pocket versus investing those funds
• Lender-specific pricing adjustments beyond standard PMI/MIP/VA
• Local property tax overrides (we use state-level effective rates; many counties differ substantially)

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Found a calibration error or missing edge case? Email [email protected] — methodology corrections get same-day turnaround.