Use this calculator to estimate your potential savings and break-even point when refinancing your home mortgage. Compare your current loan details with a proposed new loan to see if refinancing makes financial sense for you.
Current Loan Details
New Loan Details
Refinance Analysis
Current Monthly Payment:
New Monthly Payment:
Monthly Savings:
Total Interest Over New Loan Term (New Loan):
Break-Even Point:
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function calculateMonthlyPayment(principal, annualRate, termYears) {
if (principal <= 0 || annualRate <= 0 || termYears <= 0) {
return 0;
}
var monthlyRate = (annualRate / 100) / 12;
var numberOfPayments = termYears * 12;
var payment = principal * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
return isNaN(payment) ? 0 : payment;
}
function calculateTotalInterest(principal, monthlyPayment, termYears) {
if (principal <= 0 || monthlyPayment <= 0 || termYears <= 0) {
return 0;
}
var numberOfPayments = termYears * 12;
var totalPaid = monthlyPayment * numberOfPayments;
var totalInterest = totalPaid – principal;
return isNaN(totalInterest) ? 0 : totalInterest;
}
function calculateRefinance() {
var currentBalance = parseFloat(document.getElementById('currentBalance').value);
var currentRate = parseFloat(document.getElementById('currentRate').value);
var currentTerm = parseFloat(document.getElementById('currentTerm').value);
var newAmount = parseFloat(document.getElementById('newAmount').value);
var newRate = parseFloat(document.getElementById('newRate').value);
var newTerm = parseFloat(document.getElementById('newTerm').value);
var closingCosts = parseFloat(document.getElementById('closingCosts').value);
// Input validation
if (isNaN(currentBalance) || currentBalance <= 0 ||
isNaN(currentRate) || currentRate <= 0 ||
isNaN(currentTerm) || currentTerm <= 0 ||
isNaN(newAmount) || newAmount <= 0 ||
isNaN(newRate) || newRate <= 0 ||
isNaN(newTerm) || newTerm <= 0 ||
isNaN(closingCosts) || closingCosts 0) {
breakEvenPointMonths = closingCosts / monthlySavings;
}
document.getElementById('refinanceResults').style.display = 'block';
document.getElementById('currentMonthlyPaymentResult').innerHTML = '$' + currentMonthlyPayment.toFixed(2);
document.getElementById('newMonthlyPaymentResult').innerHTML = '$' + newMonthlyPayment.toFixed(2);
document.getElementById('monthlySavingsResult').innerHTML = '$' + monthlySavings.toFixed(2);
document.getElementById('totalInterestNewLoanResult').innerHTML = '$' + totalInterestNewLoan.toFixed(2);
if (monthlySavings > 0) {
document.getElementById('breakEvenPointResult').innerHTML = breakEvenPointMonths.toFixed(1) + ' months';
document.getElementById('refinanceMessage').innerHTML = 'You could save $' + monthlySavings.toFixed(2) + ' per month. Your closing costs would be recouped in approximately ' + breakEvenPointMonths.toFixed(1) + ' months.';
} else if (monthlySavings < 0) {
document.getElementById('breakEvenPointResult').innerHTML = 'N/A (No monthly savings)';
document.getElementById('refinanceMessage').innerHTML = 'Refinancing with these terms would increase your monthly payment by $' + Math.abs(monthlySavings).toFixed(2) + '. Consider if the new loan term or other benefits outweigh this increase.';
} else {
document.getElementById('breakEvenPointResult').innerHTML = 'N/A (No monthly savings)';
document.getElementById('refinanceMessage').innerHTML = 'Refinancing with these terms would result in no change to your monthly payment. Consider if the new loan term or other benefits are worth the closing costs.';
}
}
// Initial calculation on page load for default values
window.onload = function() {
calculateRefinance();
};
Understanding Your Home Refinance Options
Refinancing your home mortgage involves replacing your existing home loan with a new one. This process can offer significant financial benefits, but it's crucial to understand the implications before making a decision. Our Home Refinance Savings Calculator is designed to help you quickly assess the potential advantages and disadvantages of a new mortgage.
Why Consider Refinancing?
Homeowners typically refinance for several key reasons:
Lower Interest Rate: If market interest rates have dropped since you took out your original mortgage, refinancing to a lower rate can significantly reduce your monthly payments and the total interest paid over the life of the loan.
Lower Monthly Payments: Even without a drastically lower interest rate, extending your loan term (e.g., from 15 years remaining to a new 30-year loan) can reduce your monthly payment, freeing up cash flow. However, this often means paying more interest over the long run.
Shorter Loan Term: Conversely, you might refinance from a 30-year loan to a 15-year loan. While this increases your monthly payment, it allows you to pay off your home faster and save a substantial amount on total interest.
Cash-Out Refinance: This option allows you to borrow more than your current mortgage balance, converting a portion of your home equity into cash. This cash can be used for home improvements, debt consolidation, or other financial needs.
Switching Loan Types: You might want to switch from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage for more payment stability, or vice-versa if you anticipate moving soon.
Key Factors to Consider
Closing Costs: Refinancing isn't free. You'll incur closing costs similar to your original mortgage, which can include appraisal fees, title insurance, loan origination fees, and more. These costs can range from 2% to 5% of the new loan amount.
Break-Even Point: This is the amount of time it takes for your monthly savings from a lower payment to offset the closing costs of the refinance. If you plan to sell your home before reaching your break-even point, refinancing might not be financially beneficial.
Loan Term: Carefully consider the new loan term. A longer term means lower monthly payments but more total interest. A shorter term means higher monthly payments but less total interest.
Interest Rate vs. APR: Always compare the Annual Percentage Rate (APR), which includes fees and other costs, rather than just the interest rate, to get a true picture of the loan's cost.
Credit Score: A higher credit score will typically qualify you for better interest rates. Ensure your credit is in good standing before applying for a refinance.
How to Use the Calculator
Our calculator simplifies the comparison process:
Current Loan Details: Input your existing mortgage balance, its annual interest rate, and how many years you have left on the loan.
New Loan Details: Enter the proposed new mortgage amount (which might include your current balance plus any cash-out or closing costs rolled in), the new annual interest rate, and the new loan term in years.
Refinancing Closing Costs: Add the estimated total costs associated with securing the new loan.
Calculate: Click the "Calculate Refinance Savings" button to see your potential new monthly payment, monthly savings, total interest paid over the new loan term, and your break-even point.
Remember, this calculator provides estimates. Always consult with a qualified mortgage professional to get personalized advice and accurate figures for your specific situation.