Optimize Your Mortgage with Refinancing

Disclaimer: This is an estimate based on simplified assumptions. Consult a lender for precise loan terms and refinancing costs.

Our Refinance Calculator compares your current mortgage with a potential refinanced loan to estimate payment changes and savings. Enter your loan details to evaluate refinancing.

How to Use the Refinance Calculator

1. Enter your current loan balance (e.g., $200,000).
2. Input the current interest rate (e.g., 5%).
3. Specify the current loan term (e.g., 25 years remaining).
4. Enter the new interest rate (e.g., 3.5%) for the refinanced loan.
5. Input the new loan term (e.g., 30 years).
6. Specify the closing costs (e.g., $5,000) for refinancing.
7. Click Calculate Refinance to view payment changes, savings, and a cost comparison chart.

The Logic Behind It

The calculator uses the loan amortization formula to compute monthly payments for both loans:
M = P × (r × (1 + r)^n) / ((1 + r)^n - 1)
Where:
- M = Monthly Payment
- P = Loan Balance
- r = Monthly Interest Rate (Annual Rate / 12)
- n = Number of Payments (Term × 12)
Total Interest = (Monthly Payment × Number of Payments) - Loan Balance.
Interest Savings = Current Loan Total Interest - New Loan Total Interest.
Breakeven Period = Closing Costs / Monthly Payment Savings (in months).
The bar chart compares total costs (principal + interest) for both loans, including closing costs for the new loan.

Benefits of Using the Refinance Calculator

• Clarity: Understand payment changes from refinancing.
• Planning: Evaluate potential interest savings.
• Insight: Determine the breakeven period for closing costs.
• Visualization: Compare total costs with a chart.