Mortgage Refinance Calculator

Enter your Original mortgage Information and your new refinance mortgage information to see how much money you will save if your refinance.

This calculator will give you an estimate on a new mortgage payment after a refinance.

Original Mortgage

Original Mortgage Amount:?The original amount of principle on your Mortgage
Original Interest Rate:?The interest rate you expect to get on your mortgage
Original Number of Years:?The number of years on your mortgage
Mortgage Start Date (MM/YYYY):?The date your mortgage started

New Mortgage

Remaining Mortgage Principal:?The expected price of your new home
New Interest Rate:?The interest rate you expect to get on your mortgage
Number of Years on New Mortgage:?The interest rate you expect to get on your mortgage
Cash Out Amount (If Any):?The amount of money you will take out of your houses equity. Put 0 if you are not taking any out.

A mortgage refinance, also known as mortgage refinancing, is the process of obtaining a new mortgage loan to replace your existing one. This new mortgage is used to pay off the current mortgage, effectively closing out the old loan and replacing it with a new one. There are several reasons why someone might consider refinancing their mortgage:

  • Lower Interest Rate: One of the most common reasons to refinance is to secure a lower interest rate. When interest rates drop significantly below the rate on your current mortgage, refinancing can result in lower monthly payments and potentially significant interest savings over the life of the loan.

  • Reduce Monthly Payments: Refinancing can extend the loan term, which lowers your monthly payments. While this can reduce your immediate financial burden, it may result in paying more interest over the long term.

  • Change Loan Term: Some homeowners choose to refinance to change the term of their mortgage. For example, you can refinance from a 30-year mortgage to a 15-year mortgage to pay off the loan faster.

  • Cash-Out Refinance: This type of refinance allows you to borrow more than the outstanding loan balance and receive the difference in cash. It's a way to tap into your home equity for purposes such as home improvements, debt consolidation, or other financial needs.

  • Switch Loan Type: You can refinance from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage or vice versa to gain stability in your interest rate.

  • Remove Private Mortgage Insurance (PMI): If your home's equity has increased, you may be able to refinance to eliminate the requirement for PMI, which can reduce your monthly payments.

  • Debt Consolidation: You can use a cash-out refinance to consolidate high-interest debt into your mortgage, potentially reducing your overall interest costs.

  • Financial Goals: Refinancing can help achieve various financial goals, such as lowering your debt-to-income ratio, saving money, or accessing home equity for investments.

Keep in mind that refinancing isn't always the right choice for everyone, and there are costs associated with the process, such as closing costs and fees. It's essential to carefully evaluate the costs and benefits of refinancing based on your financial situation, goals, and the terms of the new loan. Consulting with a mortgage professional or financial advisor can help you determine whether refinancing is a sound financial decision in your particular circumstances.

A mortgage refinance calculator is a valuable tool for homeowners because it offers a swift and precise way to evaluate the financial impact of refinancing their mortgage. By entering current loan details and expected terms of a new loan, it allows individuals to estimate potential cost savings, project changes in monthly payments, assess different scenarios, determine the break-even point for recouping refinancing costs, and make well-informed decisions about whether a mortgage refinance aligns with their financial goals. In essence, it simplifies the complex financial analysis, providing homeowners with the data needed to make informed choices about their mortgage refinancing options.

  • Principal: This is the amount of money you borrow to purchase a property. You repay the principal over the term of the mortgage, typically 15 to 30 years.

  • Interest: This is the cost of borrowing money, and it is charged by the lender as a percentage of the principal. The interest rate can be fixed or variable, and it can have a significant impact on your monthly mortgage payments and overall borrowing costs.

  • Taxes: Property taxes are assessed by local governments and can be paid separately or included in your monthly mortgage payment. The tax amount is usually a percentage of the assessed value of the property.

  • Insurance: Mortgage lenders typically require borrowers to have homeowners insurance to protect the property against damage or loss. Depending on the location of the property, flood insurance may also be required.

  • Private Mortgage Insurance (PMI): If your down payment is less than 20% of the purchase price of the property, you may be required to pay for PMI. This is an insurance policy that protects the lender in case you default on the mortgage.

  • Escrow Account: An escrow account is an account managed by the lender that holds funds for property taxes, insurance, and PMI (if required). The lender collects a portion of these expenses as part of your monthly mortgage payment and then pays them on your behalf when they are due.

Anything below 5% growth is considered a good mortgage interest rate. Below 3% is a great interest rate.

Generally, it is recommended that your monthly payment may not exceed 25% of your gross income. If your monthly housing payment is above 25%, it may become hard to pay all your bills each month.

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