Calculate your potential new monthly mortgage payment after refinancing.
Enter Your Refinance Details
Estimated New Monthly Payment
$0.00
This estimate excludes taxes, insurance, and potential PMI.
Understanding Your Mortgage Refinance Payment
Refinancing your mortgage can be a strategic move to lower your monthly payments, reduce your interest costs over time, or shorten your loan term. This calculator helps you estimate the potential new monthly principal and interest (P&I) payment based on your current loan balance, desired interest rate, loan term, and estimated closing costs.
How the Calculation Works:
The core of the calculation uses the standard mortgage payment formula, also known as the annuity formula. We first determine the total loan amount by adding your current outstanding balance to the estimated refinance fees (closing costs).
Total Loan Amount = Current Outstanding Loan Balance + Estimated Refinance Fees
Then, the monthly payment (M) is calculated using the following 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 (Total Loan Amount calculated above)
i = Your monthly interest rate. This is calculated by dividing your annual interest rate by 12. (e.g., if your annual rate is 3.5%, then i = 0.035 / 12 = 0.00291667)
n = The total number of payments over the loan's lifetime. This is calculated by multiplying your loan term in years by 12. (e.g., for a 30-year loan, n = 30 * 12 = 360)
Key Factors and Considerations:
Current Outstanding Loan Balance: This is the exact amount you still owe on your existing mortgage.
New Annual Interest Rate: The interest rate you secure on your new refinanced loan. A lower rate is key to reducing payments and total interest paid.
New Loan Term (Years): The duration of your new mortgage. Opting for a shorter term typically means higher monthly payments but less total interest paid over the life of the loan. A longer term usually results in lower monthly payments but more interest paid overall.
Estimated Refinance Fees: These are the closing costs associated with refinancing, which can include appraisal fees, title insurance, origination fees, recording fees, etc. These costs are often rolled into the new loan amount, increasing the principal you borrow.
Break-Even Point: Before refinancing, it's crucial to calculate how long it will take for the savings from your lower monthly payment (or reduced interest) to recoup the closing costs.
Taxes and Insurance (Escrow): This calculator provides an estimate for Principal and Interest (P&I) only. Your actual total monthly mortgage payment will also include property taxes and homeowner's insurance premiums, which are typically collected in an escrow account.
Use this calculator as a tool to explore potential refinance scenarios. Remember to consult with a mortgage professional to get accurate quotes and understand all aspects of a refinance transaction.
function calculateRefinancePayment() {
var loanBalance = parseFloat(document.getElementById("originalLoanBalance").value);
var annualInterestRate = parseFloat(document.getElementById("refinanceInterestRate").value);
var loanTermYears = parseFloat(document.getElementById("refinanceLoanTerm").value);
var refinanceFees = parseFloat(document.getElementById("refinanceFees").value);
var monthlyPaymentResultElement = document.getElementById("monthlyPaymentResult");
var resultSection = document.getElementById("result-section");
// Clear previous error messages or results
monthlyPaymentResultElement.textContent = "$0.00";
resultSection.style.display = 'none';
// Input validation
if (isNaN(loanBalance) || loanBalance <= 0) {
alert("Please enter a valid current outstanding loan balance.");
return;
}
if (isNaN(annualInterestRate) || annualInterestRate < 0) {
alert("Please enter a valid annual interest rate.");
return;
}
if (isNaN(loanTermYears) || loanTermYears <= 0) {
alert("Please enter a valid loan term in years.");
return;
}
if (isNaN(refinanceFees) || refinanceFees 0) {
// Standard formula when interest rate is positive
monthlyPayment = principal * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else {
// If interest rate is 0, payment is just principal divided by number of payments
monthlyPayment = principal / numberOfPayments;
}
// Format the result to two decimal places
var formattedMonthlyPayment = "$" + monthlyPayment.toFixed(2);
// Display the result
monthlyPaymentResultElement.textContent = formattedMonthlyPayment;
resultSection.style.display = 'block';
}