This Refinance Calculator makes it easy to determine your potential savings from refinancing your mortgage. It lets you takes into account such things as taxes and private mortgage insurance (PMI), so you can get a precise estimate of your true savings. It also lets you calculate your break-even point for a variety of different costs, so you can see how quickly you'll recover the up-front costs of refinancing. Use the top portion to enter the information from your current mortgage, then the "new mortgage" section immediately below to enter the figures for refinancing. PMI, if needed, is calculated automatically. Use the sliding scales to see how changes in interest rate, loan term, discount points, closing costs or other factors would affect your savings.
Financial Calculators from
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Original monthly payment: $3,485
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New monthly payment: $2,252
Break Even with $9,012 in closing costs
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Monthly Payment Breakdown
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Total Remaining Payments: Current $581,291, New $338,368
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Original mortgage amount
Original amount of your mortgage.
The appraised value of your home when you purchased it.
Current interest rate
The annual interest rate for the original loan.
Current term in years
Total length of your current mortgage in years.
Number of years remaining on your current mortgage.
Income tax rate
Your current income tax rate. Use the ‘Filing Status and Federal Income Tax Rates’ table to assist you in estimating your federal tax rate.
|Tax Rate||Married Filing Jointly or Qualified Widow(er)||Single||Head of Household||Married Filing Separately|
|*Caution: Do not use these tax rate schedules to figure 2018 taxes. Use only to figure 2019 estimates. Source: Rev. Proc. 2018-57|
|10%||$0 - $19,400||$0 - $9,700||$0 - $13,850||$0 - $9,700|
|12%||$19,400 - $78,950||$9,700 - $39,475||$13,850 - $52,850||$9,700 - $39,475|
|22%||$78,950 - $168,400||$39,475 - $84,200||$52,850 - $84,200||$39,475 - $84,200|
|24%||$168,400 - $321,450||$84,200 - $160,725||$84,200 - $160,700||$84,200 - $160,725|
|32%||$321,450 - $408,200||$160,725 - $204,100||$160,700 - $204,100||$160,725 - $204,100|
|35%||$408,200 - $612,350||$204,100 - $510,300||$204,100 - $510,300||$204,100 - $306,175|
|37%||Over $612,350||Over $510,300||Over $510,300||Over $306,175|
To let the calculator determine your remaining balance, based on your original loan information and years remaining, check this box. To enter your own amount, leave this box unchecked.
Current appraised value
The current appraised value of your home.
Balance of your mortgage that will be refinanced.
New interest rate
The annual interest rate for the new loan.
New term in years
Number of years for your new loan.
Loan origination rate
This is the percentage of the new mortgage that is paid to the lender as the loan origination fee. Typically, this fee is 1% of the loan balance.
This is the number of points paid to the lender to reduce the interest rate on the mortgage. Each point costs 1% of the new loan amount.
Other closing costs
Estimate of all other closing costs for this loan. This should include filing fees, appraiser fees and any other miscellaneous fees paid.
Monthly PMI payment
Monthly cost of Principal Mortgage Insurance (PMI). For loans secured with less than 20% down, PMI is estimated at 0.5% of your loan balance each year. Monthly PMI is calculated by multiplying your starting loan balance by this percent and dividing by 12. When the equity in your home exceeds the percentage required for PMI, your PMI payment drops to zero.
Normally PMI is required if you have less than 20% equity in your home, however for the refinance of loan guaranteed by Freddie Mac or Fannie Mae you may not be required to pay PMI if your current mortgage doesn't require it. Check with your lenders for details. Check the box "do NOT include PMI" if this applies to your refinance.
Your current payment is the sum of principal, interest and PMI (Principal Mortgage Insurance). Because refinancing does not affect your insurance or taxes, they are not included here.
Your new payment is the sum of principal, interest and PMI.
Monthly PI payment
Monthly principal and interest payment.
Break even monthly payment savings
The number of months it will take for your monthly payment reduction to be greater than closing costs.
Break even PMI & interest savings
The number of months it will take for your interest and PMI savings to exceed your closing costs.
Break even total savings after-tax
The number of months it will take for your after-tax interest and PMI savings to exceed your closing costs.
Break even total savings vs. prepayment
This is the most conservative break even measure. It is the number of months it will take for your after-tax interest and PMI savings to exceed both your closing costs and any interest savings from prepaying your mortgage. The prepayment amount used in this calculation is the amount that you would have to spend on closing costs.
About Mortgage Refinancing
Most homebuyers who take out a 30-year mortgage eventually end up refinancing the loan at some point along the line. That is, provided they don't sell the place and move somewhere else first.
That's been particularly true in recent years, as falling mortgage rates have given borrowers the opportunity to save a few dollars by refinancing to a lower rate. But that's not the only reason to refinance. Here's a rundown of some of the more common reasons borrowers refinance a mortgage:
- To switch to a lower mortgage rate
- To pay off the loan faster by refinancing to a shorter term (usually at a lower rate as well)
- To lower their monthly payments by extending their loan term
- To change from an ARM (adjustable-rate mortgage) to a fixed-rate loan
- To borrow against their home equity through a cash-out refinance
- To remove another person's name from the loan, such as in the case of a divorce
This calculator is designed to deal with the first three situations. It will calculate your monthly payments and savings from refinancing, and will figure how much more you might end up paying over the long term if you choose the third option, lengthening your loan.
When you refinance, you're simply replacing your old mortgage with a new one. You go through the same steps and provide the same information you did when you got your original mortgage, and go through the same approval process. When the new mortgage is approved, those funds are used to pay off the old loan and you go simply go forward with the new loan instead.
Deciding whether to Refinance
The big question about refinancing is whether it makes financial sense or not. How much will you knock off your monthly payments? How long will it take for those savings to exceed your closing costs from refinancing? Can you afford to shorten your loan term? If you stretch out your mortgage to a longer term, will that cost you more in the long run?
These are the questions you need to answer before refinancing. This calculator can help you get those answers.
Using the Mortgage Refinance Calculator
The calculator has two main parts. In the first part, "Original mortgage," enter the information for your current mortgage. The "appraised value" should be the value of the home at the time you purchase it or otherwise took out the loan, not the current value. The calculator uses that to determine if you're presently paying for mortgage insurance.
When you refinance to a lower rate, that reduces the size of your mortgage interest deduction, which affects your savings from refinancing. The Mortgage Refinance Calculator can take that into account, which is why it asks for your income tax rate.
In the second part, "New Mortgage," you can either enter your current loan balance or let the calculator figure it out for you. If you choose the latter, the calculator determines what your current balance should be based on regular amortization, without any additional or late payments.
The "loan origination rate" is the percentage of the loan amount your lender is charging to originate the loan. Other closing costs are entered in the "other costs" box.
After entering your information, hit the "calculate" button and the calculator will figure out your new monthly payment and total savings over the life of the loan. The "View report" button will take you to a new page that will show a breakdown of your savings and the new mortgage in more detail.
Wonder what rate you could get by refinancing? Click "Get Free Quote" for a rate quote tailored to your individual profile.
- Mortgage refinance FAQ
- Mortgage refinance
- Fannie Mae
- FHA Streamline Refinance
- FHA Loans
- VA Loans
- Jumbo Loans
- Documents you need for a mortgage refinance
- Second mortgage
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