Calculator
Example Data Table
| Input | Example Value | Purpose |
|---|---|---|
| Current Loan Balance | $250,000 | Remaining principal on the existing mortgage. |
| Current Annual Rate | 7.25% | Rate on the current loan. |
| Remaining Term | 300 months | Months left on the current payoff schedule. |
| New Annual Rate | 6.10% | Quoted refinance rate. |
| New Term | 240 months | Requested refinance term. |
| Closing Costs | $4,000 | Fees due at closing. |
| Cash Out Amount | $0 | Extra funds borrowed during refinance. |
| Property Value | $325,000 | Used to estimate new loan-to-value. |
Formula Used
1) Monthly payment formula
M = P × r × (1 + r)n / ((1 + r)n - 1)
Here, P is principal, r is monthly interest rate, and n is total months.
2) Refinance loan amount
New Loan Amount = Current Balance + Cash Out + Financed Closing Costs
3) Monthly savings
Monthly Savings = Current Payment - Refinance Actual Payment
4) Break-even months
Break-Even = Out-of-Pocket Closing Costs / Monthly Savings
5) Net savings after costs
Net Savings = Current Remaining Total Paid - (Refinance Total Paid + Out-of-Pocket Costs)
6) Estimated loan-to-value
LTV = New Loan Amount / Property Value × 100
How to Use This Calculator
Step 1
Enter the remaining balance, current rate, and months left on the existing loan.
Step 2
Enter the proposed refinance rate, new term, and all closing costs.
Step 3
Add any cash-out amount if you plan to borrow extra money.
Step 4
Add an optional extra monthly payment to test faster payoff scenarios.
Step 5
Enter property value when you want an estimated LTV result.
Step 6
Click calculate to view payment changes, savings, payoff timing, export files, and the balance chart.
Frequently Asked Questions
1) What does this calculator measure?
This calculator compares your remaining loan with a refinance option. It estimates payment changes, interest cost, break-even timing, and total savings after fees. It also shows how cash-out, financed costs, and extra payments influence the result.
2) Why can a lower rate still cost more?
A lower rate can still raise total cost when the new term is much longer, closing costs are high, or you take cash out. Lower monthly payments do not always mean lower lifetime spending.
3) What is break-even in refinancing?
Break-even is the months needed for monthly savings to recover out-of-pocket closing costs. If savings are negative, or if there are no upfront costs, the usual break-even test becomes less meaningful.
4) Should I finance closing costs?
Financing costs reduces cash needed at closing, but it increases the new loan balance. That can raise interest paid over time. Compare both choices before deciding.
5) How does extra payment affect the refinance?
An extra monthly payment shortens payoff time and usually lowers lifetime interest. It may reduce monthly savings compared with the old loan, but can still improve long-term cost.
6) Is cash-out refinance included here?
Yes. Cash-out is added to the new balance because you are borrowing more. That can increase the payment and interest, so separate borrowing needs from pure rate-shopping decisions.
7) Why is property value optional?
Property value is optional because some users only need payment comparisons. When you enter it, the calculator estimates new loan-to-value, which can affect pricing and eligibility.
8) Are taxes and insurance included?
No. The calculator focuses on principal, interest, fees, cash-out, and payoff timing. Add escrow items separately when estimating the full monthly housing payment.