Calculators - Mortgage Refinancing
When is it worthwhile to refinance your mortgage? How long will it take to
break even on a mortgage refinance? The answers depend on a multitude of factors,
such as your current interest rate, the new potential rate, closing
costs and how long you plan to stay in your home. Use this calculator to sort through
the confusion, and help determine if refinancing your mortgage is a sound financial
decision. Remember, this calculator gives a very rough idea about refinancing.
Discuss the details with a mortgage loan officer for
a more refined estimate.
More resources:
Apply/Prequalify online |
Mortgage programs |
Contact a mortgage specialist
Definitions
Original mortgage amount: Original amount of your mortgage.
Appraised value: The appraised value of your home when you purchased it.
Current term in years: Total length of your current mortgage in years.
Years remaining: Number of years remaining on your current mortgage.
Income tax rate: Your current income tax rate.
Calculate balance: To let the calculator determine your remaining balance,
based on your original loan information and years remaining, check this box. To
enter your own amount, leave this box unchecked.
Current appraised value: The current appraised value of your home.
Loan balance: Balance of your mortgage that will be refinanced.
New interest rate: The annual interest rate for the new loan.
New term in years: Number of years for your new loan.
Income tax rate: Your current income tax rate.
Calculate balance: To let the calculator determine your remaining balance, based on
your original loan information and years remaining, check this box. To enter your own
amount, leave this box unchecked.
Current appraised value: The current appraised value of your home.
Loan balance: Balance of your mortgage that will be refinanced.
New interest rate: The annual interest rate for the new loan.
New term in years: Number of years for your new loan.
Loan origination rate: This is the percentage of the new mortgage that is paid to the
lender as the loan origination fee. Typically this fee is 1% of the loan balance.
Other closing costs: Estimate of all other closing costs for this loan. This should
include filing fees, appraiser fees and any other miscellaneous fees paid.
Points paid: This is the number of points paid to the lender to reduce the interest
rate on the mortgage. Each point costs 1% of the new loan amount.
Current payment: Your current payment is the sum of principal, interest and PMI
(Principal Mortgage Insurance). Because refinancing does not affect your insurance
or taxes, they are not included here.
New payment: Your new payment is the sum of principal, interest and PMI.
Monthly PMI payment: Monthly cost of Principal Mortgage Insurance (PMI). For loans
secured with less than 20% down, PMI is estimated at 0.5% of your loan balance
each year. Monthly PMI is calculated by multiplying your starting loan balance by
this percent and dividing by 12. When the equity in your home exceeds the percentage
required for PMI, your PMI payment drops to zero.
Monthly PI payment: Monthly principal and interest payment.
Breakeven monthly payment savings: The number of months it will take for your
monthly payment reduction to be greater than closing costs.
Breakeven PMI & interest savings: The number of months it will take for your interest
and PMI savings to exceed your closing costs.
Breakeven total savings after-tax: The number of months it will take for your
after-tax interest and PMI savings to exceed your closing costs.
Breakeven total savings vs. prepayment: This is the most conservative breakeven
measure. It is the number of months it will take for your after-tax interest and
PMI savings to exceed both your closing costs and any interest savings from
prepaying your mortgage. The prepayment amount used in this calculation is the
amount that you would have to spend on closing costs.