Estimate your potential monthly savings by refinancing your current mortgage.
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%
Years
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Years
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Estimated Monthly Savings
(After accounting for fees)
Understanding Mortgage Refinancing and Savings
Mortgage refinancing involves replacing your existing home loan with a new one. This is often done to take advantage of lower interest rates, change the loan term, or access home equity. The primary goal for many is to reduce their monthly mortgage payment, which can significantly impact your budget and overall financial health.
How the Calculator Works:
This calculator estimates your potential monthly savings by comparing your current mortgage payment with a new, refinanced mortgage payment. It also factors in the upfront costs associated with refinancing.
Current Mortgage Payment: Calculated using the standard mortgage payment formula (M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]), where:
P = Current Loan Balance
i = Monthly interest rate (Annual rate / 12)
n = Total number of payments (Loan Term in Years * 12)
New Mortgage Payment: Calculated using the same formula with the new interest rate and loan term.
Gross Monthly Savings: The difference between the current and new monthly mortgage payments.
Net Monthly Savings: The gross monthly savings minus the total refinance fees spread over the original loan term. This provides a more realistic picture of your ongoing savings.
Key Inputs:
Current Loan Balance: The outstanding principal amount on your current mortgage.
Current Interest Rate: The annual interest rate of your existing mortgage.
Current Loan Term (Years): The remaining duration of your current mortgage in years.
New Interest Rate: The annual interest rate you expect to get on the new, refinanced mortgage.
New Loan Term (Years): The duration of the new mortgage you are considering. You can choose to shorten, lengthen, or keep the same term.
Estimated Refinance Fees: Costs such as appraisal fees, title insurance, origination fees, etc., associated with obtaining the new loan.
When to Refinance:
Consider refinancing if:
Current mortgage rates are significantly lower than your existing rate.
Your credit score has improved, allowing you to qualify for better rates.
You want to shorten your loan term to pay off your mortgage faster (though monthly payments might increase).
You need to convert from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage for payment stability, or vice versa.
You want to tap into your home's equity for other financial needs (cash-out refinance).
Always compare the potential savings against the cost of refinancing to ensure it makes financial sense for your situation.
function calculateMonthlyPayment(principal, annualRate, termInYears) {
var monthlyRate = (parseFloat(annualRate) / 100) / 12;
var numberOfPayments = parseInt(termInYears) * 12;
if (monthlyRate <= 0 || numberOfPayments <= 0 || principal <= 0) {
return 0; // Handle cases with zero or invalid rates/terms
}
var monthlyPayment = principal * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
return isNaN(monthlyPayment) ? 0 : monthlyPayment;
}
function calculateRefinance() {
var currentLoanAmount = parseFloat(document.getElementById("currentLoanAmount").value);
var currentInterestRate = parseFloat(document.getElementById("currentInterestRate").value);
var currentLoanTerm = parseFloat(document.getElementById("currentLoanTerm").value);
var newInterestRate = parseFloat(document.getElementById("newInterestRate").value);
var newLoanTerm = parseFloat(document.getElementById("newLoanTerm").value);
var refinanceFees = parseFloat(document.getElementById("refinanceFees").value);
var resultDiv = document.getElementById("result");
var monthlySavingsDiv = document.getElementById("monthlySavings");
// Clear previous results
monthlySavingsDiv.innerHTML = "";
resultDiv.style.display = 'none';
// Validate inputs
if (isNaN(currentLoanAmount) || isNaN(currentInterestRate) || isNaN(currentLoanTerm) ||
isNaN(newInterestRate) || isNaN(newLoanTerm) || isNaN(refinanceFees) ||
currentLoanAmount <= 0 || currentInterestRate < 0 || currentLoanTerm <= 0 ||
newInterestRate < 0 || newLoanTerm 0) {
monthlySavingsDiv.innerHTML = "$" + netMonthlySavings.toFixed(2);
resultDiv.style.display = 'block';
resultDiv.style.backgroundColor = '#28a745'; // Success green
} else if (netMonthlySavings < 0) {
monthlySavingsDiv.innerHTML = "$" + netMonthlySavings.toFixed(2);
resultDiv.style.display = 'block';
resultDiv.style.backgroundColor = '#dc3545'; // Danger red for negative savings
} else {
monthlySavingsDiv.innerHTML = "$" + netMonthlySavings.toFixed(2);
resultDiv.style.display = 'block';
resultDiv.style.backgroundColor = '#ffc107'; // Warning yellow for zero savings
}
}