Compare a replacement mortgage with an existing mortgage while accounting for the refinancing inputs.
Mortgage Refinance Calculator
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Table of Contents
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What is Mortgage Refinance?
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How to Use This Calculator
- Enter or select Original mortgage amount, Due date, Mortgage term, Interest rate, Compounding frequency. Complete any remaining fields required by your chosen method.
- Check the unit beside each measurement. For a percentage or rate, use the scale and time period stated in the form.
- Choose Calculate, then compare the output with the formula and example below. If you change a value or option, calculate again to update the result.
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Formula Used
Next balance = current balance × (1+r) − payment − extra principal. Repeat for each payment period.
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Variables Explained
| Input | What it means |
|---|---|
| Original mortgage amount | Use the measured or stated value for this item, with the unit or category shown beside the field. |
| Due date | The calendar date for this event; the order of start and end dates affects the interval. |
| Mortgage term | Use the measured or stated value for this item, with the unit or category shown beside the field. |
| Interest rate | The quoted rate for the time basis shown in the form; an annual rate is not a monthly rate. |
| Compounding frequency | How often the event, payment or administration occurs; use the form’s stated schedule. |
| New mortgage's due date | The calendar date for this event; the order of start and end dates affects the interval. |
| Costs of refinancing | Use the measured or stated value for this item, with the unit or category shown beside the field. |
| New loan's term | Use the measured or stated value for this item, with the unit or category shown beside the field. |
| Cash in / out | Use the measured or stated value for this item, with the unit or category shown beside the field. |
| Mortgage points | Use the measured or stated value for this item, with the unit or category shown beside the field. |
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Worked Example
A balance of 100,000 at a monthly rate of 0.5% accrues 500 interest. A 1,000 payment then reduces principal by 500.
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Why Use This Calculator?
Compare the remaining cost of the current loan with the full cost of the proposed schedule, including the months you expect to keep the loan.
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Common Mistakes
- A lower monthly payment can come from a longer term. Include closing costs, points and any change in principal before comparing total savings.
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Frequently Asked Questions
What is the refinancing break-even point?
A simple estimate is upfront refinancing cost divided by monthly savings. It is only useful when the savings are positive and the loan balances and terms are compared consistently.
Does the payment include every borrowing cost?
The principal-and-interest formula covers the loan itself. Fees and other costs are included only where the form explicitly adds them; compare the estimate with the lender’s actual schedule.
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Sources & References
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