Mortgage Refinance Calculator
A mortgage refinance involves replacing your current home loan with a new one, often to take advantage of lower interest rates and sometimes to borrow money against the equity you’ve built in your home. The mortgage refinance calculator below will help you determine how much you could save on your monthly mortgage payment by refinancing as well as what you’re breakeven point would be.
Financial Calculators from
Dinkytown.net
Original mortgage | Original monthly payment: $2,837.03 |
New mortgage | New monthly payment: $2,476.14 |
Break Even with $6,684.31 in closing costs |
Monthly Payment Breakdown |
Total Remaining Payments: Current $473,144.28, New $507,061.08 |
Definitions
Original mortgage amount
Original amount of your mortgage.
Appraised value
The appraised value of your home when you purchased it.
Current interest rate
The annual interest rate for the original loan.
Current term in years
Total length of your current mortgage in years.
Years remaining
Number of years remaining on your current mortgage.
Income tax rate
Your current income tax rate. Use the ‘Filing Status and Federal Income Tax Rates on Taxable Income’ table to assist you in estimating your Federal tax rate.
| Tax Rate | Married Filing Jointly or Qualified Surviving Spouse | Single | Head of Household | Married Filing Separately |
|---|---|---|---|---|
| 10% | $0 - $23,200 | $0 - $11,600 | $0 - $16,550 | $0 - $11,600 |
| 12% | $23,200 - $94,300 | $11,600 - $47,150 | $16,550 - $63,100 | $11,600 - $47,150 |
| 22% | $94,300 - $201,050 | $47,150 - $100,525 | $63,100 - $100,500 | $47,150 - $100,525 |
| 24% | $201,050 - $383,900 | $100,525 - $191,950 | $100,500 - $191,950 | $100,525 - $191,950 |
| 32% | $383,900 - $487,450 | $191,950 - $243,725 | $191,950 - $243,700 | $191,950 - $243,725 |
| 35% | $487,450 - $731,200 | $243,725 - $609,350 | $243,700 - $609,350 | $243,725 - $365,600 |
| 37% | Over $731,200 | Over $609,350 | Over $609,350 | Over $365,600 |
| *Caution: Do not use these tax rate schedules to figure 2023 taxes. Use only to figure 2024 estimates. Source: Rev. Proc. 2023-34 | ||||
Calculate balance
To let the calculator determine your remaining balance, based on your original loan information and years remaining, check this box. To enter your own amount, leave this box unchecked.
Current appraised value
The current appraised value of your home.
Loan balance
Balance of your mortgage that will be refinanced.
New interest rate
The annual interest rate for the new loan.
New term in years
Number of years for your new loan.
Loan origination rate
This is the percentage of the new mortgage that is paid to the lender as the loan origination fee. Typically, this fee is 1% of the loan balance.
Points paid
This is the number of points paid to the lender to reduce the interest rate on the mortgage. Each point costs 1% of the new loan amount.
Other closing costs
Estimate of all other closing costs for this loan. This should include filing fees, appraiser fees and any other miscellaneous fees paid.
Monthly PMI payment
Monthly cost of Principal Mortgage Insurance (PMI). For loans secured with less than 20% down, PMI is estimated at 0.5% of your loan balance each year. Monthly PMI is calculated by multiplying your starting loan balance by this percent and dividing by 12. When the equity in your home exceeds the percentage required for PMI, your PMI payment drops to zero.
Normally PMI is required if you have less than 20% equity in your home, however for the refinance of loan guaranteed by Freddie Mac or Fannie Mae you may not be required to pay PMI if your current mortgage doesn't require it. Check with your lenders for details. Check the box "do NOT include PMI" if this applies to your refinance.
Current payment
Your current payment is the sum of principal, interest and PMI (Principal Mortgage Insurance). Because refinancing does not affect your insurance or taxes, they are not included here.
New payment
Your new payment is the sum of principal, interest and PMI.
Monthly PI payment
Monthly principal and interest payment.
Break even monthly payment savings
The number of months it will take for your monthly payment reduction to be greater than closing costs.
Break even PMI & interest savings
The number of months it will take for your interest and PMI savings to exceed your closing costs.
Break even total savings after-tax
The number of months it will take for your after-tax interest and PMI savings to exceed your closing costs.
Break even total savings vs. prepayment
This is the most conservative break even measure. It is the number of months it will take for your after-tax interest and PMI savings to exceed both your closing costs and any interest savings from prepaying your mortgage. The prepayment amount used in this calculation is the amount that you would have to spend on closing costs.
The calculator tool provided is for informational purposes only and does not reflect any specific mortgage or home equity line of credit offered by Leader Bank or any specific terms that may be available for such products. For information on available Leader Bank products and services, please contact a Leader Bank loan officer directly. Examples of monthly payment amounts shown in calculators does not include taxes, insurance or any condominium or HOA fees applicable; as such your total monthly housing payment would be higher. For any adjustable or variable rate loan examples provided, interest rate may increase after consummation and your fully indexed rate, annual percentage rate and monthly principal and interest rates may be higher.
What is a Mortgage Refinance?
As mentioned above, a mortgage refinance is a new home loan which pays off your existing home loan. Like applying for a mortgage, a refinance involves a review of your credit, income, employment, and finances by your lender. Your lender will also conduct a home appraisal to assess the current market value of your home so they can accurately determine the amount of equity you have in your home.
Why Refinance Your Mortgage?
Many homeowners seek to refinance when interest rates drop so they can lower their monthly payment. A refinance can also be used to shorten the term of a mortgage or as a tool for homeowners looking to switch from an adjustable-rate mortgage (ARM) to a conventional fixed-rate mortgage. A cash-out refinance involves borrowing against the equity in your home to get access to funds to achieve a range of goals including consolidating high-interest debt or completing renovations.
What is the Break-Even Point for Refinancing?
One of the first things homeowners will want to consider when determining whether to refinance their mortgage is what their break-even point will be. The break-even point represents how many years it will take you to break even on the closing costs of your refinance from the savings of your new mortgage payment compared to your previous payment amount. Generally, refinancing makes sense only if you plan to stay in your home past the break-even point.
What Are the Costs of Refinancing?
The costs of refinancing will vary by lender, but it’s important to note that some financial institutions (including Leader Bank) offer no-cost refinances. Other lenders will include upfront fees for refinances including application fees, loan origination charges, appraisal fees, and title search and insurance fees. There could also be escrow costs for taxes and insurance associated with your refinance. It goes without saying that when refinancing your loan you should inquire about any upfront cost with your lender so you can factor them in when calculating your break-even point to determine whether a refinance makes sense for you.
