 |
Determine how long will it take to break even if you refinance your mortgage with this refinance breakeven calculator. Compare results as you alter various factors, including your current interest rate, the refinance rate, closing costs and how long you plan to stay in your home. Figure out if refinancing your mortgage is a sound financial decision.
|
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 This is the percentage of the new mortgage that is paid to the lender as the loan origination fee. Typically this fee is 1% of the loan balance. Other closing costs Estimate of all other closing costs for this loan. This should include filing fees, appraiser fees and any other miscellaneous 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 Your current payment is the sum of principal, interest and PMI (Principal Mortgage Insurance). Because refinancing does not affect your insurance or taxes, they are not included here. New payment Your new payment is the sum of principal, interest and PMI. Monthly PMI payment Monthly cost of Principal 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 the equity in your home exceeds the percentage required for PMI, your PMI payment drops to zero. Monthly PI payment Monthly principal and interest payment. Breakeven monthly payment savings The number of months it will take for your monthly payment reduction to be greater than closing costs. Breakeven PMI & interest savings The number of months it will take for your interest and PMI savings to exceed your 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 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. |
| Note: This information is for general use only. Use this information as part of a full research process. General financial advice does not always apply directly to individual financial matters. Please consult a financial expert with specific and complex questions about your individual situation. |
This refinance breakeven calculator is just one of more than 30 personal finance calculators that we offer to consumers to help make knowledgeable decisions in all-important financial situations. Please use the refinance breakeven calculator as part of a thorough research process. For more news, advice and resources, visit our knowledge center.
Mortgage application activity spiked week-over-week, the Mortgage Bankers Association (MBA) said this morning, as mortgage rates dove to new all-time record lows. Read more
Obtaining a pre-approval letter is an important part of searching for a new home. Why? There are many reasons for its importance. Read more
