Refinance Calculator

Refinancing a home loan provides many home owners with the opportunity to change the terms of their existing home loan to either reduce their monthly mortgage payment or switch from a fluctuating Adjustable Rate Mortgage to a fixed rate mortgage. The refinance calculator on this page helps you experiment with how refinancing your home loan can change your monthly payments. More important, the Lifetime Savings chart on this page helps you understand how much money a refinance can save or cost you over the lifetime of your loan. (Learn more)

When you refinance your home loan, you are taking a lower interest rate loan from a lender to completely pay off the balance of your existing higher interest rate home loan with. Once your existing home loan is paid off, you will begin to make monthly payments towards your new loan. One thing to be careful of is that some loans come with a pre-payment penalty. If your existing home loan has a pre-payment penalty, you may have to pay a hefty fee to your lender to refinance to a new loan. Having to pay this pre-payment penalty can strip away any benefit you may have seen from refinancing your loan. To find out if your loan has a pre-payment penalty, you can either check your loan closing papers or contact your lender.

Refinancing you home loan can reduce your monthly mortgage payments in more ways than just reducing your interest rate. Because your new loan becomes amortized over 30 years, your monthly loan payment will be even lower because you will be paying your loan off over a longer period of time than originally expected. The downside, however, is that the longer your loan gets amortized over, the more interest you will be paying over the life of that loan.

Although in many cases refinancing your loan to a lower interest rate loan can reduce your monthly payment, you may have to pay your lender a large upfront fee in the form of Mortgage Discount Points or closing fees. If, however, the interest rate on your new loan is substantially lower than your existing loan, the monthly savings might easily pay for the upfront fees that you may have to pay to get the new loan. The Lifetime Savings chart on this page helps you determine if paying these fees is a good idea by demonstrating the lifetime savings of refinancing your loan over 30 years .

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Existing Loan Details

Current Monthly Payment:
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Current Mortgage Amount:
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Current Interest Rate:
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New Loan Details

THIS SUMMARY PROVIDES ESTIMATES ONLY . Before making any home or loan purchase decision, you should obtain the advice of a professional financial advisor who is aware of your individual circumstances. Please refer to the Terms Of Use for a complete description of the proper use of this information.

Understanding Your Results

Lifetime Savings from Refinancing your Home: The heading of this chart shows you what your monthly savings will be from refinancing your home. If you have owned your home for many years, you may see that your monthly savings from refinancing can be very high. This is because when you refinance your loan, your loan amount gets re-amortized over 30 years. This means that your remaining loan balance gets paid back over a long period of time thereby reducing your monthly payment.

The body of this chart shows you how much money you can save, or lose, over 30 years if you refinance your loan. The behavior of this chart varies depending on the interest rate of your current loan, interest rate of your new refinanced loan, and the points and fees that you will pay for this refinanced loan.

For many people, this chart should start off with red bars (indicating a loss) for the first few years after refinancing but quickly become green (indicating a savings). This means that savings from the reduced interest rate of your refinanced loan will pay off the fees that you had to pay to refinance. You should note though that if you sell your home before the years where the bars become green, you would have lost money by refinancing your loan and not reaped any of the benefits of the lower interest rate.

If this chart shows red for all 30 years, this indicates that the interest rate of your current loan is lower than the interest rate on the refinanced loan and that you will not gain any benefit from refinancing. Otherwise, this could also mean that the points and fees on the refinanced loan are so high that you will never recuperate those fees through the lower interest rate of your refinanced loan .