function calculateRefinance() {
var balance = parseFloat(document.getElementById('loanBalance').value);
var currPay = parseFloat(document.getElementById('currentPayment').value);
var rate = parseFloat(document.getElementById('newRate').value);
var term = parseInt(document.getElementById('newTerm').value);
var costs = parseFloat(document.getElementById('closingCosts').value);
if (!balance || !currPay || !rate || !term) {
alert("Please fill in all required fields to see results.");
return;
}
// Loan Calculation Formula: P = L[c(1 + c)^n]/[(1 + c)^n – 1]
var monthlyRate = (rate / 100) / 12;
var numMonths = term * 12;
var newPayment = balance * (monthlyRate * Math.pow(1 + monthlyRate, numMonths)) / (Math.pow(1 + monthlyRate, numMonths) – 1);
var monthlySavings = currPay – newPayment;
var breakEven = monthlySavings > 0 ? (costs / monthlySavings) : 0;
var totalSavings = (monthlySavings * numMonths) – costs;
document.getElementById('resNewPayment').innerText = "$" + newPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resMonthlySavings').innerText = "$" + monthlySavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
if (monthlySavings <= 0) {
document.getElementById('resBreakEven').innerText = "Never (New payment is higher)";
document.getElementById('resTotalSavings').innerText = "Negative Savings";
} else {
document.getElementById('resBreakEven').innerText = Math.ceil(breakEven) + " Months (" + (breakEven / 12).toFixed(1) + " years)";
document.getElementById('resTotalSavings').innerText = "$" + totalSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
}
document.getElementById('refiResults').style.display = 'block';
}
How a Mortgage Refinance Calculator Works
Refinancing your mortgage essentially means replacing your current loan with a new one, typically with different terms or a lower interest rate. Our Mortgage Refinance Savings Calculator helps you determine if the financial benefits of a lower rate outweigh the upfront closing costs.
Key Metrics Explained
Remaining Loan Balance: The total amount you still owe on your current mortgage.
New Monthly Payment: The estimated principal and interest payment for your new loan.
Break-Even Point: This is the most critical metric. It tells you exactly how many months it will take for your monthly savings to cover the initial closing costs. If you plan to move before this date, refinancing may not be worth it.
Closing Costs: Usually ranging from 2% to 5% of the loan amount, these include appraisal fees, title insurance, and lender fees.
When Should You Refinance?
A general rule of thumb used to be "refinance if you can drop your rate by 1%." However, with modern closing costs, even a 0.5% drop can be beneficial if you plan to stay in the home for more than 5 years. Use the calculator to see your specific break-even window.
Example Scenario
Imagine you have a $300,000 balance on a loan with a 7.5% interest rate. Your current payment is roughly $2,100. If you refinance into a new 30-year loan at 6.5% with $5,000 in closing costs:
Your new payment drops to approximately $1,896.
You save $204 per month.
Your break-even point is 25 months ($5,000 / $204).
If you stay in the home for 10 years, you will save over $19,000 after paying back the closing costs.
Note: This calculator estimates Principal and Interest. It does not include changes to property taxes or homeowners insurance, which are typically held in escrow.