Refinance Calculator

How this result is built

Compare your current mortgage payment and interest with a new rate, term, and closing costs.

A refinance is two loans, not a discount coupon. The new payment can fall because the rate fell, because the term got longer, or both. Those are different outcomes. This page shows the payment change and the interest left on each path.

What the opening example is for

Break-even divides closing costs by the monthly payment drop. If the new term is longer, you can pass break-even on the payment and still pay more interest over the life of the loan. Read both lines.

The walkthrough below uses the numbers already sitting in Refinance Calculator. Press Calculate and the headline should match this page. Then put your own figures in. The math does not run until you press the button, and Clear hides the result.

What each field is doing

The “Current balance” line on Refinance Calculator starts at $300,000.00. The other fields stay put while you change this one. That is the clean way to see what this line is doing inside the result.

Refinance Calculator treats “Current rate” as its own entry, and the form opens with 7.10%. If the label is a rate, type the annual figure the contract uses. If it is money, type the amount that will actually move, not a rounded hope.

Before you replace it, “Years left on the current loan” reads 26 on Refinance Calculator. Leave that figure only when it matches the statement, the quote, or the plan you are testing. Press Calculate after the edit so the chart and the schedule move with it.

The remaining fields

Look at “New rate” first if you are checking Refinance Calculator: the filled value is 6.20%. A round example is useful for learning the page. It is a poor substitute for the number on your own paperwork, so replace it and run the form again.

The “New term” line on Refinance Calculator starts at 30. The other fields stay put while you change this one. That is the clean way to see what this line is doing inside the result.

Refinance Calculator treats “Closing costs rolled in or paid” as its own entry, and the form opens with $6,000.00. If the label is a rate, type the annual figure the contract uses. If it is money, type the amount that will actually move, not a rounded hope.

The opening result, line by line

Press Calculate on the opening form and New monthly payment is $1,874.16. That is the number the rest of this section is talking about.

Current payment is $2,109.90 when you run the opening figures on Refinance Calculator. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

On this opening pass, monthly difference is $235.75. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

Refinance Calculator reports that interest on the current path is $358,289.23. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

How those lines were produced

Interest on the new loan is $368,695.83 when you run the opening figures on Refinance Calculator. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

On this opening pass, months to recover closing costs is 25.5. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

Break-even counts only the payment drop against closing costs. A longer term can lower the payment and still raise total interest.

A second pass changes only “Current balance”, from $300,000.00 to $330,000.00. New monthly payment moves from $1,874.16 to $2,057.90. Nothing else on the form was edited, so the gap between those two results is the effect of that one field on Refinance Calculator. If the gap is tiny, this page is not very sensitive to that entry. If the gap is large, get that entry from a document before you plan around the result.

What this page will not claim

Refinance Calculator does not know your credit score, the county’s tax bill, or what an appraiser will say. Type the price, the loan, and the escrow you were quoted. Compare the payment with the loan estimate, and treat a small rounding difference as normal.

Refinance Calculator stops at its own formula. When the next question is different, open Mortgage Calculator (Principal, interest, tax, insurance, PMI, and HOA in one payment.); Mortgage Comparison Calculator (Two offers, one interest difference.); APR Calculator (The rate that includes upfront fees.). Do not add those results to this one as if they were the same kind of dollar.

Check the result before you use it

Start on Refinance Calculator by reading the labels, not the headline. The opening labels are Current balance ($300,000.00), Current rate (7.10%), Years left on the current loan (26), New rate (6.20%), New term (30), Closing costs rolled in or paid ($6,000.00). If a label is not the fact you have, the result cannot turn into that fact later. The illustration on the form lands on $1,874.16. When you press Calculate and see that same figure, the button and this explanation are using one formula.

Change one field at a time. Write down the headline, edit a single line, and press Calculate again. A large jump means that line carries the result. A line that does not move is a line the formula ignores, which is a reason to confirm you opened the right page. Refinance Calculator is built for one job: Break-even months against the interest you still pay. The description on the page says the same thing in a sentence: Compare your current mortgage payment and interest with a new rate, term, and closing costs.

When the paperwork disagrees

Then hold the headline next to a source outside the site. That source might be a loan estimate, an account statement, a pay stub, or the public limit named in the methodology. A few cents of difference on a long schedule is ordinary rounding. A different rate, a fee you never typed, or a tax the form does not ask for is not rounding. Correct the input. Do not average the page with the paperwork.

When the outside source still disagrees, Refinance Calculator has reached the edge of what it will claim. It will not phone a lender, pull a county record, or apply a credit you left blank. Send the calculator name, every input, and the result you expected through the contact page if you think the formula itself is wrong. Until that is settled, read $1,874.16 as the output of the fields above and nothing else.

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