Estimate your new monthly mortgage payment after refinancing.
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%
Years
$
Your Estimated New Monthly Payment:
$0.00
(Excludes property taxes, homeowner's insurance, and HOA fees)
Understanding Mortgage Refinancing and Your New Payment
Mortgage refinancing involves replacing your existing home loan with a new one. People refinance for various reasons, including securing a lower interest rate, reducing their monthly payment, shortening their loan term, or cashing out equity. This Free Refinance Mortgage Payment Calculator helps you estimate your new principal and interest (P&I) payment after refinancing, allowing you to see the potential impact on your budget.
How the Calculator Works
The calculator uses a standard mortgage payment formula, adjusted to reflect the specifics of a refinance. Here's a breakdown of the calculation:
Loan Principal: This is the total amount you owe on your current mortgage after subtracting any new loan fees you might be rolling into the new loan. So, the calculation uses: Current Loan Balance + New Loan Fees.
Annual Interest Rate: The interest rate you will pay on the new loan. The calculator converts this percentage into a monthly rate by dividing it by 12.
Loan Term (in Months): The total number of months over which you will repay the new loan. The calculator converts your input years into months by multiplying by 12.
The core formula used is the standard annuity mortgage payment formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment (Principal & Interest)
P = The principal loan amount (Current Loan Balance + New Loan Fees)
i = Your monthly interest rate (Annual Interest Rate / 12 / 100)
n = Total number of payments (Remaining Loan Term in Years * 12)
If the monthly interest rate (i) is 0, a simpler calculation is used: M = P / n.
When to Consider Refinancing
Refinancing might be a smart financial move if:
Interest Rates Have Dropped: If current market rates are significantly lower than your existing rate, you could save substantial money over the life of the loan.
You Need to Lower Monthly Payments: Refinancing into a lower interest rate or a longer loan term can reduce your immediate payment, freeing up cash flow.
You Want to Convert Equity: A cash-out refinance allows you to borrow against your home's equity for renovations, debt consolidation, or other major expenses.
Your Credit Score Has Improved: A better credit score can help you qualify for more favorable interest rates.
Important Considerations
While refinancing can offer benefits, remember to account for:
Closing Costs: Refinancing typically involves fees similar to your original mortgage (appraisal, title insurance, origination fees, etc.). These are often rolled into the new loan. Our calculator includes an optional field for these fees.
Break-Even Point: Calculate how many months it will take for the savings from your new, lower payment to offset the closing costs.
Loan Term Reset: If you refinance into a new loan term (e.g., 30 years), you might end up paying more interest over time, even with a lower rate, compared to sticking with your original shorter term.
Use this calculator as a starting point to understand the potential impact of refinancing on your monthly P&I payment. Always consult with a mortgage professional for personalized advice and a comprehensive analysis of your options.
function calculateRefinancePayment() {
var currentLoanBalance = parseFloat(document.getElementById("currentLoanBalance").value);
var newInterestRate = parseFloat(document.getElementById("newInterestRate").value);
var remainingLoanTerm = parseInt(document.getElementById("remainingLoanTerm").value);
var newLoanFees = parseFloat(document.getElementById("newLoanFees").value) || 0; // Default to 0 if not provided
var resultContainer = document.getElementById("result-container");
var monthlyPaymentResult = document.getElementById("monthlyPaymentResult");
// Clear previous results and styles
monthlyPaymentResult.textContent = "$0.00";
resultContainer.style.display = "none";
// Input validation
if (isNaN(currentLoanBalance) || currentLoanBalance <= 0 ||
isNaN(newInterestRate) || newInterestRate < 0 ||
isNaN(remainingLoanTerm) || remainingLoanTerm <= 0 ||
isNaN(newLoanFees) || newLoanFees < 0) {
alert("Please enter valid positive numbers for all fields.");
return;
}
var principal = currentLoanBalance + newLoanFees;
var monthlyInterestRate = newInterestRate / 12 / 100;
var numberOfPayments = remainingLoanTerm * 12;
var monthlyPayment = 0;
if (monthlyInterestRate === 0) {
// Handle case with 0% interest
monthlyPayment = principal / numberOfPayments;
} else {
// Standard mortgage payment formula
var numerator = principal * monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments);
var denominator = Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1;
monthlyPayment = numerator / denominator;
}
// Format the result to two decimal places
var formattedMonthlyPayment = "$" + monthlyPayment.toFixed(2);
monthlyPaymentResult.textContent = formattedMonthlyPayment;
resultContainer.style.display = "block";
}