Mortgage Refinance Calculator
Can you save money by refinancing your mortgage? That
depends on a multitude of factors. These factors include your current
interest rate, the new potential rate, closing costs and how long you
plan to stay in your home. Use this calculator to sort through the
confusion and determine if refinancing your mortgage is a sound
financial decision. Click the "View Report" button for a detailed look
at your records.
Definitions
Original mortgage amount
Original amount of your mortgage.
Appraised value
The appraised value of your home when you purchased it.
Current term in years
Total length of your current mortgage in years.
Years remaining
Number of years remaining on your current mortgage.
Income tax rate
Your current income tax rate.
Calculate balance
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.
Loan balance
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.
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.
Points paid
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.
Current payment
Your current payment is the sum of principal, interest and PMI
(Private Mortgage Insurance). Because refinancing does not affect
your insurance or taxes, they are not included here.
New payment
Your new payment is the sum of principal, interest and PMI.
Monthly PMI payment
Monthly cost of Private 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.
Monthly PI payment
Monthly principal and interest payment.
Breakeven monthly payment savings
The number of months it will take for your monthly payment reduction to be greater than closing costs.
Breakeven PMI and interest savings
The number of months it will take for your interest and PMI savings to exceed your closing costs.
Breakeven total savings after-tax
The number of months it will take for your after-tax interest and PMI savings to exceed your closing costs.
Breakeven total savings vs. prepayment
This is the most conservative breakeven 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.
Information and interactive calculators are made available to you as
self-help tools for your independent use and are not intended to
provide investment advice. We cannot and do not guarantee their
applicability or accuracy in regards to your individual circumstances.
All examples are hypothetical and are for illustrative purposes. We
encourage you to seek personalized advice from qualified professionals
regarding all personal finance issues.
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