If you first got your home mortgage when interest rates were high — or at least higher than they are right now — you might be considering refinancing to secure a lower interest rate. Will refinancing reduce your monthly mortgage payment and/or save you money over the life of the loan? Our Mortgage Refinance Calculator can help you understand how refinancing could affect your monthly mortgage payment.
Home Mortgage Refinance Calculator Definitions
Current loan balance — The total amount, including principal and interest, that you owe on your current mortgage.
Annual interest rate on new mortgage — The new interest rate you anticipate you could secure if you refinance your mortgage.
Number of months — The number of months (multiply the number of years by 12) you want to take or think you will need to pay off the new mortgage. For example, 30 years (360 months) and 15 years (180 months) are typical mortgage repayment periods.
Loan origination fee — The lender refinancing your mortgage will charge you a fee to review your loan application, process paperwork and submit your loan. This fee usually ranges between 0-2% of the amount you’re asking to borrow.
Discount points — Your lender may ask you to pay points in exchange for a lower interest rate. These points are actually pre-paid interest. Instead of paying the interest over the life of the loan, points are a way to pay that amount up front at the inception of the loan. Points typically equal 1% of the loan amount, and they’re rolled into your closing costs.1
Other fees — Your lender may charge various other fees related to your refinancing. Check with the lender to find out what these might be and how much they will cost.