The Refinance Calculator will help you determine whether refinancing your loan for a lower interest rate is a wise decision for you. While a lower interest rate will mean lower monthly payments and less total interest, refinancing will also mean paying closing costs and, in some cases, points. If the monthly savings exceed these closing costs, refinancing is a good option.

• Enter ballpark values by dragging the sliders left or right. Enter exact numbers by clicking in the box and type your number (no commas).
• The results of your calculations show in the box near the bottom of the calculator.

Loan Amount

This is the amount of your current loan.

Loan Rate

This is the interest rate of your current loan.

Loan Term

The loan term is the maximum time in years in which you agreed to pay back the loan in full.

Months Paid

Months paid is the number of months that you have made payments on your current loan, thus far.

Current Balance

This is the estimated balance of your current loan, principal and interest only (no tax or insurance fees included).

Monthly payment

This is the estimated monthly amount you have to pay for principal and interest only on you current loan.

Outstanding Interest

The is the estimated amount of interest you still have to pay on your current loan if you continue to pay to the end of your loan term.

Loan Rate

This is the interest rate of your new loan.

Loan Term

The loan term is the maximum in years in which you agreed to pay back the new loan in full.

Points

Points are prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of the loan amount (e.g., two points on a $100,000 mortgage would cost $2,000)

Other Costs

Other costs are also known as closing costs. Closing costs are expenses incurred by buyers and sellers in transferring ownership of a property. These may include an origination fee, taxes, the costs of obtaining title insurance, transfer fees, etc. They can often total several thousands of dollars. You may need to consult a loan officer for an estimate.

Savings Rate

Most borrowers choose to roll closing costs and points into the loan balance; however, if you choose to pay those costs out-of-pocket, you should enter your savings interest rate. You can then determine how much interest you will lose by taking that money out of your savings.

Monthly payment

In the monthly payment results, compare your monthly payment amounts between your current loan and your proposed, new loan.

Outstanding Interest

Compare the total interest you will pay over the life of the loans.

Results

The results box offers guidance and suggests how to interpret the graph.

Graph

Mouse over the graph and move to a speicific year. The dynamic read-out shows your cumulative cost savings up to that year. The break-even point is where the current loan and the new loan lines intersect. You need to keep your existing loan until the break-even point in order for the refinancing to be a wise decision. In other words, at that time, the closing costs are equal to your cumulative monthly savings. For instance, if you intend to stay in the home for at least 2 years, and the break-even point is less than 2 years, then refinancing will save you money. If you plan to stay in the home for a maximum of 2 years and the break-even point is more than 2 years, then you will lose money with a refinancing.