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function calculateRefinance() {
var balance = parseFloat(document.getElementById('currentBalance').value);
var currentPMT = parseFloat(document.getElementById('currentPayment').value);
var rate = parseFloat(document.getElementById('newRate').value);
var years = parseInt(document.getElementById('newTerm').value);
if (isNaN(balance) || isNaN(currentPMT) || isNaN(rate) || isNaN(years) || balance <= 0 || rate <= 0 || years <= 0) {
alert("Please enter valid positive numbers for all fields.");
return;
}
var monthlyRate = (rate / 100) / 12;
var numberOfPayments = years * 12;
// Monthly Payment Formula: P * [i(1+i)^n] / [(1+i)^n – 1]
var x = Math.pow(1 + monthlyRate, numberOfPayments);
var newMonthly = (balance * x * monthlyRate) / (x – 1);
var monthlySavings = currentPMT – newMonthly;
var totalNewCost = newMonthly * numberOfPayments;
var totalInterest = totalNewCost – balance;
// For Lifetime Savings, we assume the user would have paid the "Current PMT" for the remainder of a comparable term
// This is a simplified "Cash Flow" comparison
var lifetimeSavings = (currentPMT * numberOfPayments) – totalNewCost;
document.getElementById('newMonthlyVal').innerHTML = '$' + newMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('monthlySavingsVal').innerHTML = '$' + monthlySavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalInterestVal').innerHTML = '$' + totalInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('lifetimeSavingsVal').innerHTML = '$' + lifetimeSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('refiResult').style.display = 'block';
// Smooth scroll to results
document.getElementById('refiResult').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}
Mortgage Refinance Savings Calculator
Your Refinance Estimate
New Monthly Payment
$0.00
Monthly Savings
$0.00
Total New Interest
$0.00
Lifetime Savings
$0.00
*Estimation excludes taxes, insurance, and closing costs. Always consult with a financial advisor.
How to Calculate Your Mortgage Refinance Savings
Refinancing a mortgage involves replacing your existing home loan with a new one, typically to take advantage of lower interest rates or to change the loan term. To determine if refinancing is the right financial move, you must compare your current monthly principal and interest (P&I) payment with the projected payment of a new loan.
The Refinance Formula
The math behind a refinance is based on the standard amortization formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
- M: Monthly Payment
- P: Remaining Loan Balance
- i: Monthly Interest Rate (Annual Rate / 12 / 100)
- n: Number of Months (Term in Years × 12)
Real-World Example
Let's say you have a remaining balance of $250,000. Your current monthly payment is $1,600. You are offered a new 30-year fixed rate at 4.0%.
- New Monthly Payment: Using the formula, your new P&I would be approximately $1,193.54.
- Monthly Savings: $1,600 – $1,193.54 = $406.46 savings per month.
- Break-Even Point: If your closing costs are $4,000, you would divide $4,000 by your monthly savings ($406.46). You would break even in approximately 10 months.
Key Factors to Consider
When using a mortgage refinance calculator, keep these three factors in mind:
- Closing Costs: Most refinances cost between 2% and 5% of the loan amount. Ensure your monthly savings justify these upfront costs.
- Loan Term: Resetting a 30-year mortgage when you only have 20 years left might lower your monthly payment but increase the total interest paid over time.
- Equity: Lenders typically require at least 20% equity to avoid Private Mortgage Insurance (PMI), which can eat into your refinance savings.