🏦 Mortgage Refinance Calculator

M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1] Where: M = Monthly payment P = Principal (loan balance) r = Monthly interest rate (annual rate ÷ 12) n = Number of monthly payments (term in months) Example: $350,000 at 6.5% for 30 years r = 6.5% ÷ 12 = 0.5417% n = 360 months M = $350,000 × [0.005417 × 1.005417³⁶⁰] ÷ [1.005417³⁶⁰ − 1] M = $2,212.24/month

Break-Even Months = Total Closing Costs ÷ Monthly Savings Example: Closing Costs = $5,500 Monthly Saving = $200 Break-Even = $5,500 ÷ $200 = 27.5 months (~2.3 years) If you plan to stay longer than 27.5 months → Refinance! If you plan to move sooner → Probably not worth it.

Total Interest = (Monthly Payment × Term Months) − Principal Current loan total interest = (M_cur × n_cur) − Balance New loan total interest = (M_new × n_new) − Balance Interest Saved = Current Total Interest − New Total Interest Net Benefit = Interest Saved − Closing Costs

✅ Refinance if: → New rate is at least 0.5–1% lower → You'll stay in the home past break-even point → You want to shorten loan term (15yr vs 30yr) → You want to switch ARM → Fixed rate → You need cash-out for home improvements ❌ Avoid refinancing if: → Moving soon (before break-even) → Resetting to a longer term (e.g. 30yr again) despite lower rate — may pay more total interest → Closing costs too high vs savings → Credit score has dropped significantly

Typical refinance closing costs: 2–5% of loan balance Common fees: Origination fee: 0.5–1% of loan Appraisal: $300–$700 Title search/ins: $700–$1,500 Recording fees: $100–$500 Points (optional): 1% of loan per point (lowers interest rate) No-closing-cost refi: Costs rolled into rate or balance → Higher rate but no upfront payment → Makes sense if staying short-term