Understanding Refinance
The refinance calculator shows you exactly how much money you can save by replacing your current loan with a new one at a lower interest rate or different terms. Refinancing is one of the most powerful financial moves available to homeowners and borrowers, but it only makes sense when the savings outweigh the closing costs and fees associated with the new loan. This calculator takes your current loan balance, interest rate, and remaining term along with the proposed new rate and term to calculate your new monthly payment, monthly savings, and total savings over the life of the loan. It also factors in estimated closing costs so you can see your true net savings and calculate how many months it will take to break even on the refinancing costs. Even a small reduction in interest rate can produce significant savings on a large loan over many years. For example, reducing your mortgage rate by just one percentage point on a three hundred thousand dollar loan can save you tens of thousands of dollars over the loan term. However, refinancing to a longer term may lower your monthly payment while actually increasing your total cost. This calculator helps you evaluate all scenarios and make an informed decision about whether refinancing is the right move for your financial situation.