Credit
Refinancing + Equity Recycling
Discover how much equity you can release and what happens when you reinvest it.
Country-specific LTV and rate defaults applied. Max LTV: 80%
Current Property
Refinancing Parameters
Reinvestment Strategy
What to do with the released equity?
Refinancing is worth it
Annualised Return on Released Equity: 10.0%
$120,000
LTV: 57.1%
$64,000
Max LTV 80%
Current Monthly Payment
$1,221/mo
6.8% · 20y
New Monthly Payment
$1,555/mo
6.8% · 25y
10-Year Projection (10y)
10-Year Projection — 10y
Simulate investing the released equity
$61,760 invested, extra payment $333/mo
View investment analysisFor educational purposes only. Consult a financial advisor before refinancing.
How It Works
Enter your property's current value, outstanding mortgage balance, target LTV for the new mortgage, and the new interest rate. The calculator shows how much equity you can release, the new monthly payment, and the net benefit of deploying the released equity.
Frequently Asked Questions
What is equity recycling?
Equity recycling means refinancing your mortgage to a higher balance, releasing the equity built up through appreciation and capital repayment as cash. This cash can be used as a deposit on a new investment property.
What LTV should I target when refinancing?
Most lenders allow refinancing up to 75–80% LTV for investment properties. Going above 75% typically means higher interest rates.
Does refinancing always make sense?
Not always. It makes sense when: (1) the new rate is lower than the current one; (2) the released capital can be reinvested at a higher return than the refinancing cost; (3) cash flow after refinancing remains positive.
What are the costs of refinancing?
Typical costs include: early repayment charge (0.5–2%), arrangement fee (0.5–1%), valuation (€300–€600), legal fees. These are factored into the net benefit calculation.
About This Calculator
This Refinancing & Equity Calculator is an essential tool for homeowners and real estate investors looking to optimize their mortgage terms and leverage their property's value. It helps you determine the financial viability of refinancing your existing mortgage by calculating the break-even point and potential savings, while also revealing the available home equity you can access. Understanding these metrics is crucial for making informed decisions that can significantly impact your long-term financial health and investment strategy.
How It Works
Input Current Mortgage Details
Begin by entering your current mortgage's outstanding balance, interest rate, and remaining loan term. These figures establish your baseline financial commitment and are critical for comparing against potential new mortgage terms. Accurate input ensures the calculator can precisely assess your current monthly payments and total interest over the remaining term.
Enter New Mortgage Offer Details
Next, input the proposed new mortgage's interest rate, desired loan term, and any associated closing costs. Closing costs, which typically range from 2% to 5% of the loan amount, are a significant factor in determining the break-even point for refinancing. A lower interest rate or shorter term can lead to substantial savings, but only if the closing costs don't negate the benefits.
Provide Property Value and Desired Cash-Out (Optional)
Specify your property's current market value. This is essential for calculating your home equity. If you plan to take cash out during the refinancing process, indicate the desired amount. This cash-out option can be a powerful tool for funding other investments or home improvements, but it will affect your new loan amount and equity position.
Calculate Break-Even Point and Savings
The calculator will then process all your inputs to determine the break-even point — the time it takes for your savings from the lower interest rate to offset the refinancing costs. It will also project your total interest savings over the life of the new loan and the amount of accessible home equity. This step provides a clear financial roadmap for your refinancing decision.
Analyze Results and Make an Informed Decision
Finally, review the calculated break-even point, total savings, and available equity. A short break-even period (e.g., under 2-3 years) often indicates a favorable refinancing opportunity. Consider your financial goals, market conditions, and how accessing equity aligns with your broader investment strategy before proceeding. This analysis empowers you to make a strategic choice.
Worked Example — Austin, Texas, United States
For a primary home in Austin, Texas, United States, compare a $360,000 purchase funded by $270,000 at 6.4%.
- →Enter the purchase price, deposit, current local rate and remaining term.
- →Review the payment, total interest and affordability output produced by the calculator.
- →Test a higher rate and preserve an emergency reserve before choosing a loan.
The result shows the sensitivity of this local financing scenario; confirm the lender's binding conditions.