The decision of Refinancing your mortgage depends on many factors- including your current interest rate, the new potential rate, closing costs and how long you plan to stay in your home. Use this calculator to determine if refinancing your mortgage is a sound financial decision. (Java is required to run this program and it takes a while Java applets being downloaded.)
Rent Vs Buy
Original mortgage amount – Original amount of your mortgage.
Appraised value – The appraised value of your home when you purchased it.
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.
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 – Any other installment loan payments, such as student loans or unsecured loans.
Other closing costs – Estimate of all other closing costs for this loan. This should include filing fees, appraiser fees and any other misc. fees paid.
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.
Current payment – 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.
New payment – Your new payment is the sum of principle, interest and PMI.
Monthly PMI payment – Monthly cost of Principle 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 your loan balance exceeds 20% of the original purchase price, your PMI payment drops to zero.
Monthly PI payment – Monthly principle and interest payment.
Breakeven monthly payment savings – The number of months it will take for your interest and PMI savings to exceed your and closing costs.
Breakeven PMI & interest savings – savings The number of months it will take for your interest and PMI savings to exceed your and closing costs.
Breakeven total savings after tax – The number of months it will take for your after tax interest and PMI savings to exceed your closing costs.
Breakeven total savings vs. prepayment – prepayment This is the most conservative breakeven 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.
Information and interactive calculators are made available to you as self-help tools for your independent use. We can not and do not guarantee their accuracy or their applicability to your circumstances. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.
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