Mortgage Refinance Comparison Calculator

Mortgage Refinance Comparison

Mortgage refinance is a topic, which many borrowers consider in order to lower their interest burden. While this may be the prime reason for people to choose refinancing and restructuring their home loans, there are some times other reasons as well.

Reasons for Loan Refinancing or Mortgage Restructuring

The main 3 reasons for people to look for mortgage refinancing are as given below.

  1. Lower Your Payment: Refinance and your monthly payment could drop, which could mean interest payment savings over the life of the loan. Check today’s rates or use the Custom Rate Calculator to see how much you could lower your payments.
  2. Cash Out: Refinance and get cash to pay for college, home improvements, consolidating debt, and much more. Find out what loan programs may be right for your cash out needs.
  3. Switch to a Fixed Rate: Get the stability of the same principal and interest monthly payments. If your Adjustable Rate Mortgage is set to adjust or the payments are too high, it might be time to look at a fixed rate. Find out if refinancing makes sense for you.

But, refinancing of a mortgage often involves some basic or fixed costs, and they should be considered carefully while evaluating a refinancing option. Careless decision making and multiple refinancing can land you in a situation, where you pay up even higher overall costs than servicing your original loan.

How to Compare Mortgage Refinance Options

Here we present you a simple online calculator, which allows you to compare upto 3 different refinancing options. You just have to enter the details of your options, and this refinance comparison calculator will evaluate the different options. It will let you know the monthly payments, the tenure of the new loan etc. The best part is that this calculator will also consider the fixed costs and tell you in how much time you will be able to break even i.e. in how much time the additional cost incurred on closing the old loan will be offset by the savings in the new refinance scheme.

Inputs Required to be Entered

Following inputs are required to be entered to run this Mortgage Refinance Comparison calculator.

  1. Current Payment: The amount of principal + interest you currently pay as part of your monthly mortgage payment.
  2. Refinance Amount: The amount you plan to refinance. This amount could be the balance of your current mortgage loan or less if you plan to pay some extra at closing to get the balance down
  3. New Interest Rate: The annual percentage rate you will pay for this loan.
  4. Length of New Loan (Years): How long you will pay on this loan.
  5. Points: The number of points (or percentage of the loan amount) you’ll be paying to close this loan.
  6. Other Closing Costs: Any other costs you’ll be paying during the closing of your loan. These might be costs like the appraisal, property taxes, property insurance, title insurance, realtor fees, etc.


Output Results Calculated by Mortgage Refinance Comparison Calculator

Following results will be given after calculations.

  1. New Monthly Payments: ‘Principal’ + ‘Interest’ + ‘Additional Principal’ (where applicable) to be paid each month.
  2. Monthly Savings: ‘Current Payment’ – ‘New Monthly Payment’ shows how much money you will save each month on your mortgage payment. If this number is negative this may not be a good refinance option for you or it may be that you are refinancing for a shorter ‘Length of Loan’ than you currently have and it still benefits you.
  3. Total Closing Costs: It determine how many months it will take you to break even or actually start saving money by refinancing.
  4. Time to Break Even: The number of months at which your ‘Monthly Savings’ adds up to cover ‘Total Closing Costs’. At this point your refinance starts to save you money. You should not refinance unless you plan to stay in your home or keep this property longer than this many months. If your monthly payment is going up (‘Monthly Savings’ is negative), ‘Months to Break Even’ will say ‘N/A’. This may happen if you are refinancing for a shorter ‘Length of Loan’ than your current mortgage.
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Lots of approximations and assumptions have been made while developing the calculators.

Please make your own calculations before making any financial decision.