Refinance Calculator

Refinance Calculator: Is Refinancing Right for You?

Refinancing your mortgage can save you thousands of dollars, but is it the right decision for you? Use our Refinance Calculator to compare your current loan with a potential refinance and see how much you can save on monthly payments, interest, and overall costs.

Once you refinance, plan extra payments with the Loan Payoff Calculator to pay off your loan faster.

How to Use This Calculator

1. Enter Your Current Loan Details:
   • Loan balance, interest rate, and remaining term.
2. Provide New Loan Details:
   • New interest rate and loan term.
3. Include Closing Costs:
   • Add any costs associated with refinancing.

What the Calculator Tells You

1. Your New Monthly Payment:
   Discover how much you’ll pay each month on your refinanced loan. This value factors in your remaining loan balance, the new interest rate, and your selected loan term. A lower monthly payment can provide financial relief and free up cash flow.
2. Monthly Savings Compared to Your Current Loan:
   See how much you’ll save each month by refinancing to a lower interest rate or longer term. Even small monthly savings can add up to significant reductions in overall costs over the life of your loan.
3. Total Interest Saved Over the Loan Term:
   Compare the total interest paid on your current loan versus the refinanced loan. By securing a lower interest rate or shortening your loan term, you can save thousands—or even tens of thousands—over time.
4. The Break-Even Point (Time to Recover Closing Costs):
   Refinancing often involves upfront closing costs. The calculator shows how many months it will take for your monthly savings to offset these costs, helping you determine whether refinancing is a financially sound decision.

Benefits of Refinancing

1. Lower Interest Rates:
   Refinancing to a lower rate reduces the total interest paid over the life of your loan. This can save you significant money, particularly if rates have dropped since you originally secured your mortgage.
2. Shorter Loan Terms:
   Switching to a shorter loan term (e.g., from 30 years to 15 years) allows you to pay off your loan faster. Although monthly payments may increase, the reduced loan term often results in lower total interest payments.
3. Lower Monthly Payments:
   Extending your loan term or lowering your interest rate reduces your monthly payment. This frees up cash for other financial goals, such as building savings, paying off other debts, or investing.
4. Access to Home Equity:
   Some homeowners refinance to access their home equity, converting it into cash for major expenses such as home renovations, education, or debt consolidation. This is called a cash-out refinance and can be a strategic financial tool if used wisely.
5. Simplify Your Finances:
   Refinancing can consolidate multiple debts or streamline your budget by reducing monthly expenses, giving you greater financial control and peace of mind.

Disclaimer

The results provided by this calculator are estimates based on the information you input. They do not account for all variables, such as fluctuating interest rates, changes in property taxes or insurance, or additional fees. Always consult a financial advisor or lender for personalized advice tailored to your specific financial situation. Refinancing may not be the best option for everyone, and the potential savings should be weighed against the associated costs.