How could refinancing my mortgage affect my payment or payoff time?
Use this calculator to help determine if you should refinance your mortgage. Enter your current mortgage principal and interest payment, your current mortgage balance, the new interest rate, term of the refinanced loan, points and closing costs. This calculator will then show you the new monthly principal and interest payment amount, the amount of money you can save each month and how many months you will pay on the new loan before you actually start saving money (months to break even). (Note: this calculator may show negative monthly savings and months to break if your monthly payment actually goes up. That may happen if the interest rate is higher or the length of your refinanced loan is shorter – for instance, if you refinance a 30 year loan to a 15 year loan.) You can display and/or print the amortization schedule for your loan.
Title: A title for these calculator results that will help you identify it if you have printed out several versions of the calculator.
Lender: The name of your potential lender. This field is not required but may help if you have printed out several loan scenarios.
Current Payment P&I: The amount of principal + interest you currently pay as part of your monthly mortgage payment. Do not include insurance and taxes or other escrow amounts.
Refinance Amount: The amount you plan to refinance. This amount could be the balance of your current mortgage loan or less if you plan to pay some extra at closing to get the balance down. It could even be more than your current balance if you plan to take some extra money out of your equity.
New Interest Rate: The annual percentage rate you will pay for this loan.
Length of New Loan: How long you will pay on this loan. Also choose whether ‘Length of Loan’ is years or months.
Points: The number of points (or percentage of the loan amount) you’ll be paying to close this loan. Check ‘Roll into Loan’ if the cost of the loan points is being financed and included in the ‘Loan Amount’.
Other Closing Costs: Any other costs you’ll be paying during the closing of your loan. These might be costs like the appraisal, property taxes, property insurance, title insurance, realtor fees, etc. Check ‘Roll into Loan’ if your closing costs (not to include loan points) is being financed and included in the ‘Loan Amount’.
New Monthly Payment: ‘Principal’ + ‘Interest’ + ‘Additional Principal’ (where applicable) to be paid each month. Actual payment could include escrow for insurance and property taxes plus private mortgage insurance (PMI).
Monthly Savings: ‘Current Payment’ – ‘New Monthly Payment’ shows how much money you will save each month on your mortgage payment. If this number is negative this may not be a good refinance option for you or it may be that you are refinancing for a shorter ‘Length of Loan’ than you currently have and it still benefits you.
Total Closing Costs: ‘Points’ dollar amount + ‘Other Closing Costs’ helps determine how many months it will take you to break even or actually start saving money by refinancing.
Time to Break Even: The number of months at which your ‘Monthly Savings’ adds up to cover ‘Total Closing Costs’. At this point your refinance starts to save you money. You should not refinance unless you plan to stay in your home or keep this property longer than this many months. If your monthly payment is going up (‘Monthly Savings’ is negative), ‘Months to Break Even’ will say ‘N/A’. This may happen if you are refinancing for a shorter ‘Length of Loan’ than your current mortgage.
Total Loan Amount: ‘Refinance Amount’ + ‘Points’ (if rolled into loan) + ‘Other Closing Costs’ (if rolled into loan).
Total Interest: Total amount of interest you will pay over ‘Length of Loan’.
Total Paid: Total amount of principal + interest you will pay over ‘Length of Loan’.
Points Amount: The points percentage applied to the amount you borrow gives the dollar amount the loan points will cost.
Number of Payments: The number of payments you will make to pay off the loan.
Annual Cost: The amount of money you will pay each year for this loan.