Mortgage Refinance Calculator

Mortgage Refinance is evaluated from Current Remaining Balance, Current Monthly Payment and New Interest Rate. The calculation reports New Monthly Payment, Monthly Savings and Break-Even Point.

Results

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About the Mortgage Refinance Calculator

Mortgage Refinance is treated here as a quantitative relation between Current Remaining Balance, Current Monthly Payment, New Interest Rate and New Loan Term and New Monthly Payment, Monthly Savings, Break-Even Point and Lifetime Interest Savings.

The calculator uses a custom php logic configuration. Each reported value is read as a direct evaluation of the stored rules with the declared field formats and units.

Formula basis:
New Monthly Payment = Balance x r x (1+r)ⁿ / [(1+r)ⁿ - 1]
Where r = new_rate / 1200, n = new_term_months
Monthly Savings = Current Monthly Payment - New Monthly Payment
Break-Even Months = Closing Costs / Monthly Savings
= (Current Monthly x Months Remaining) - Current Balance
- [(New Monthly x New Term Months) - Current Balance]
- Closing Costs

Interpret the outputs in the order shown by the result fields. Optional inputs affect only the outputs that depend on those variables.

Formula & How It Works

The calculation applies the following relations exactly as recorded in the metadata:

New Monthly Payment = Balance x r x (1+r)ⁿ / [(1+r)ⁿ - 1]
Where r = new_rate / 1200, n = new_term_months
Monthly Savings = Current Monthly Payment - New Monthly Payment
Break-Even Months = Closing Costs / Monthly Savings
= (Current Monthly x Months Remaining) - Current Balance
- [(New Monthly x New Term Months) - Current Balance]
- Closing Costs

Each output field is produced by substituting the supplied inputs into the relevant relation and then applying the declared rounding or text format.

Worked Examples

Example 1: Classic Rate-and-Term Refinance

Inputs

current_balance: 280000 current_monthly: 2100 new_annual_rate: 6.25 new_term_months: 360 closing_costs: 6500
New Monthly Payment: $1,678.74. Monthly Savings: $300.24. Break-Even Point: 22 months. Lifetime Interest Savings: -$17,152

With Current Remaining Balance = 280,000, Current Monthly Payment = 2,100, New Interest Rate = 6.25 and New Loan Term = 360 as the stated inputs, the result is New Monthly Payment = $1,678.74, Monthly Savings = $300.24 and Break-Even Point = 22 months. Each value corresponds to the declared output fields.

Example 2: Refinance to 15-Year Term

Inputs

current_balance: 320000 current_monthly: 2260 new_annual_rate: 5.75 new_term_months: 180 closing_costs: 7000
New Monthly Payment: $1,918.56. Monthly Savings: $343.13. Break-Even Point: 21 months. Lifetime Interest Savings: -$19,174

With Current Remaining Balance = 320,000, Current Monthly Payment = 2,260, New Interest Rate = 5.75 and New Loan Term = 180 as the stated inputs, the result is New Monthly Payment = $1,918.56, Monthly Savings = $343.13 and Break-Even Point = 21 months. Each value corresponds to the declared output fields.

Example 3: Barely Worth It — Small Rate Drop

Inputs

current_balance: 180000 current_monthly: 1320 new_annual_rate: 6.75 new_term_months: 300 closing_costs: 5000
New Monthly Payment: $1,079.19. Monthly Savings: $193.01. Break-Even Point: 26 months. Lifetime Interest Savings: -$11,848

With Current Remaining Balance = 180,000, Current Monthly Payment = 1,320, New Interest Rate = 6.75 and New Loan Term = 300 as the stated inputs, the result is New Monthly Payment = $1,079.19, Monthly Savings = $193.01 and Break-Even Point = 26 months. Each value corresponds to the declared output fields.

Example 4: No-Closing-Cost Refinance Decision

Inputs

current_balance: 240000 current_monthly: 1850 new_annual_rate: 6.5 new_term_months: 360 closing_costs: 0
New Monthly Payment: $1,438.92. Monthly Savings: $257.35. Break-Even Point: 0 months. Lifetime Interest Savings: -$9,131

With Current Remaining Balance = 240,000, Current Monthly Payment = 1,850, New Interest Rate = 6.5 and New Loan Term = 360 as the stated inputs, the result is New Monthly Payment = $1,438.92, Monthly Savings = $257.35 and Break-Even Point = 0 months. Each value corresponds to the declared output fields.

Common Use Cases

  • Determine if refinancing makes financial sense
  • Calculate the break-even point for refinancing costs
  • Compare total interest paid on current vs new loan