Discover potential savings with our Refinance Calculator, designed to help homeowners determine if refinancing their mortgage could result in financial benefits.
The Refinance Calculator is a tool designed to help homeowners make an informed decision about whether refinancing their mortgage could result in potential savings. The calculator works by comparing the total cost of an existing mortgage (remaining principal plus interest payments) to the total cost of a refinanced mortgage (new loan amount, interest payments, and refinance closing costs). The purpose of the tool is to provide an estimate of potential savings and assist homeowners in understanding the financial implications of refinancing. Learn more about the process at investopedia.
While the Refinance Calculator offers a valuable snapshot of potential savings from refinancing, it has limitations. The calculator provides estimates based on the input values and does not account for external variables such as changes in future interest rates, the possibility of early loan repayment, or changes in personal financial circumstances. The calculator also doesn’t factor in variables like mortgage insurance or potential tax implications of refinancing. As with any financial decision, homeowners should consider consulting with a financial advisor or mortgage professional for a full analysis.
How To Use Our Refinancing Calculator
Input Your Current Mortgage Information
Enter the remaining balance on your current mortgage, your current mortgage interest rate, and the remaining term of your current mortgage. The remaining balance should reflect the amount you still owe on your mortgage. The current mortgage rate is the annual interest rate of your existing mortgage. The remaining term is the number of years left until your mortgage is fully paid off.
Input Proposed Refinanced Mortgage Details
Next, enter the proposed new mortgage rate and the term for the new mortgage. The new mortgage rate is the annual interest rate you could secure if you refinanced your mortgage. The new term is the length of the new loan in years. Also, input the estimated closing costs for the refinance, which are the fees and costs you would need to pay to refinance your mortgage.
Calculate and Review the Output
Click the “Calculate” button to find out if refinancing could potentially save you money. The calculator will provide an estimate of your potential savings, or inform you if it’s more cost-effective to stick with your current mortgage. Remember, this is a simple tool and doesn’t account for all possible factors, so you should consult a financial advisor or mortgage professional for a full analysis.