Mortgage Refinance Calculator
| Detail | Current Loan | Refinanced Loan | Difference |
|---|---|---|---|
| Monthly Payment | - | - | - |
| Remaining Interest | - | - | - |
| Loan Term | - | - | - |
| Total Cost (Principal + Interest) | - | - | - |
Refinancing may make sense if:
• Interest rates have dropped significantly (1%+ lower)
• You can shorten your loan term
• Your credit score has improved
• You need to lower monthly payments
• You want to switch from adjustable to fixed rate
• You can recoup closing costs quickly
Refinancing may NOT make sense if:
• You plan to move soon (before break-even)
• Closing costs are too high relative to savings
• You're extending your loan term significantly
• You're adding years of interest payments
• The savings are minimal
• You're taking cash out for non-essential spending
| Date | Current Loan | New Loan | Monthly Savings | Interest Savings | Currency | Actions |
|---|
Mortgage Refinance Calculator Guide
Learn how to save thousands with our easy-to-use refinance calculator. Complete with examples, formulas, and 15 FAQs.
Refinancing your mortgage can feel complicated, but it doesn't have to be. Think of it like this: If you could save $200 every month just by signing some papers, wouldn't you want to know exactly how much you could save? That's what our Mortgage Refinance Calculator helps you figure out!
In this guide, we'll walk you through everything in simple language. No financial jargon - just clear explanations, real examples, and a calculator that does all the math for you.
What Is Mortgage Refinancing?
Mortgage refinancing is like trading in your current home loan for a new one with better terms. Imagine you bought a car with a high-interest loan, and two years later, you find a bank offering much lower rates. You'd want to switch, right? That's exactly what refinancing does for your home loan.
Simple Example:
Sarah has a $300,000 mortgage at 4.5% interest. She refinances to a new $300,000 loan at 3.5% interest.
- Before: Pays $1,520 per month
- After: Pays $1,347 per month
- Saves: $173 every month, or $2,076 per year
Over 30 years, that's $62,280 in savings!
Try Our Mortgage Refinance Calculator
Don't guess about your savings - calculate them! Our tool works in 50+ currencies and saves your calculations automatically.
The Math Made Simple
Our calculator uses standard mortgage formulas. Here's what happens behind the scenes:
The Monthly Payment Formula:
Where:
M = Monthly payment
P = Loan amount
r = Monthly interest rate (annual rate ÷ 12)
n = Total number of payments (years × 12)
Don't worry about memorizing this - our calculator does all the work! But understanding the formula helps you see why even small rate changes make big differences.
Understanding Each Calculator Field
Here's what each field means and how to fill it out:
1. Current Loan Amount
What it is: How much you still owe on your mortgage
How to find it: Check your latest mortgage statement or log into your lender's website
Example: $300,000 remaining balance
2. Current Interest Rate (%)
What it is: Your current annual interest rate
How to find it: Look at your loan documents or ask your lender
Example: 4.5% (the average rate for mortgages taken out 3-5 years ago)
3. Repayment Period (Years)
What it is: How long your current loan lasts
How to find it: Usually 30 years for most mortgages
Example: 30 years total, with 20 years remaining
4. Number of Months Remaining
What it is: How many payments you have left
How to calculate: (Total years × 12) - (Payments already made)
Example: 10 years already paid = 120 months, so 240 months remain
5. New Loan Amount
What it is: The amount you want to refinance (can be same as current or different)
Common choices: Same amount, or less if you're paying down debt
Example: $300,000 (same amount to keep comparison simple)
6. New Interest Rate (%)
What it is: The rate you can get today
How to find it: Check with lenders or online rate comparison sites
Example: 3.5% (current market rates are often 1%+ lower)
7. New Repayment Period
What it is: How long your new loan will last
Common choices: Same term, shorter term, or longer term
Example: 30 years (starting fresh) or 20 years (keeping same end date)
8. Closing Costs
What it is: Fees to process the new loan
Typical range: 2-5% of loan amount
Example: $5,000 for a $300,000 loan
Pro Tip: The "Break-Even Point"
The most important number in refinancing is your break-even point. This tells you how long it takes to recover your closing costs through monthly savings. If you plan to stay in your home longer than the break-even point, refinancing makes sense!
Example: $5,000 closing costs ÷ $173 monthly savings = 29 months break-even
Real Example Calculation
Let's walk through Sarah's refinance example step by step:
| Item | Current Loan | New Loan | Difference |
|---|---|---|---|
| Loan Amount | $300,000 | $300,000 | Same |
| Interest Rate | 4.5% | 3.5% | -1.0% |
| Loan Term | 20 years remaining | 30 years | +10 years |
| Monthly Payment | $1,520 | $1,347 | -$173/month |
| Total Interest | $164,813 remaining | $184,968 total | Savings* |
| Closing Costs | - | $5,000 | +$5,000 |
| Break-even | - | 29 months | 2.4 years |
*Note: Even though total interest looks higher on the new loan, remember Sarah already paid 10 years of interest on her current loan. The remaining interest is what matters for comparison.
Key Features of Our Calculator
50+ Currencies
Calculate in your local currency - perfect for international homeowners or expats.
Auto-Save & History
Your work saves automatically. Compare different scenarios side by side.
Export Results
Save reports as PDF, HTML, or text files to share with lenders or advisors.
Complete Comparison
See monthly savings, total interest savings, and break-even point all in one view.
When Refinancing Makes Sense
Good Reasons to Refinance
• Rates dropped 1%+ since your original loan
• You can shorten your loan term
• Your credit score improved significantly
• You need lower monthly payments
• You want to switch from adjustable to fixed rate
• You'll stay in the home past break-even point
Think Twice About Refinancing
• You plan to move soon
• Closing costs are very high
• You're extending loan term significantly
• Savings are minimal (< $100/month)
• You're taking cash out for non-essentials
• You're already far into your loan term
15 Frequently Asked Questions About Mortgage Refinancing
Making Your Decision
Refinancing is a big financial decision, but it doesn't have to be scary. Think of it like this:
- Calculate: Use our calculator to see real numbers
- Compare: Look at monthly savings vs. total cost
- Consider timing: Will you stay past the break-even point?
- Shop around: Get quotes from 3-4 lenders
- Think long-term: Consider both monthly cash flow and total interest paid
Final Tip: The "1% Rule"
A quick rule of thumb: If current rates are at least 1% lower than your rate AND you plan to stay in your home at least 3-5 more years, refinancing is probably worth exploring. But always verify with our detailed calculator!
Remember, every situation is unique. What works for your neighbor might not work for you. That's why having a tool that shows your specific numbers is so valuable.