Our Mortgage Refinance Calculator is an online tool that will allow you to generate the cost of a refinance and the amount of money you may be able to save monthly, and over time, with your mortgage loan. It is an extremely helpful (and free!) tool that you can use and reuse whenever the need arises. Using this tool is easier than you think, so just follow the step-by-step process on how to use our Mortgage Refinance Calculator below and see instant results.
Using the Refinance Calculator
Step 1: Access the Calculator
Start by opening the mortgage refinance calculator (you can also find our refinance calculator in the menu under "Tools & Calculators.")
Step 2: Gather and Input your Current Loan’s Information
Gather some information about your current mortgage loan. This will give you the best results when using the calculator.
Now is when you can start inputting your current loan details by dragging the sliders to indicate the following:
- Your remaining loan amounts
- The interest rate
- The remaining length of your loan (in years)
Step 3: Enter your Potential Refinanced Loan’s Information
With this step you’ll begin entering the information regarding the new loan you’re seeking. You can easily adjust (and re-adjust) the factors with this scale to give you a few different ideas with possible loan amounts. You’ll be asked to enter the following:
- New loan amount
- The interest rate you are looking for
- The length of the loan (in years) you desire
- Estimated closing costs
Step 4: See your Results
After this, the calculator will generate your estimated new monthly mortgage payment and each of the following:
- Monthly savings
- Total interest savings
- Amount of time to break even on your refinance
Each of these numbers will allow you to have a very accurate estimate of the refinance you’re looking for. You can play around with the numbers to generate different results, and you can download your results to share with your loan originator or a family member.
What is the “Breakeven Period”?
A part of the refinance process is learning when you will “breakeven” on your loan. Your breakeven period is the amount of time it will take to begin saving money with your refinance and recoup all the costs of a new loan (closing costs, fees, etc.). Although your monthly payments may be lower immediately after beginning your refinance, you will see the full benefit when costs are covered. The time of a breakeven period varies according to each refinance, so using our refinance calculator or chatting with your loan originator can give you an estimate that is specific to your situation.
Benefits of Refinancing your Mortgage Loan
The number one reason that many people refinance is to get a lower interest rate on their mortgage. A lower rate translates to lower payments, which means you’ll pay less for your home overall. Paying less towards your mortgage each month also frees up extra funds in your budget that you can put towards your short- and long-term savings goals. Refinancing also offers an advantage if you want to clear your mortgage debt in less time. This means that you may be able to build equity in your home faster with a mortgage refinance.
Want to learn more? Contact a local mortgage expert in your area, or visit the refinance calculator and give it a spin.
