1. What is a Mortgage Refinance Loan Calculator?

Definition: This calculator estimates the monthly payment for a mortgage refinance loan based on the principal amount, interest rate, and loan term.

Purpose: It helps homeowners determine potential savings or costs when refinancing their mortgage.

2. How Does the Calculator Work?

The calculator uses the standard mortgage formula:

Where:

• \( M \) — Monthly payment (USD)
• \( P \) — Loan principal amount (USD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Number of payments (loan term in years × 12)

Explanation: The formula calculates the fixed monthly payment required to fully amortize the loan over its term.

3. Importance of Mortgage Refinance Calculation

Details: Accurate payment calculations help borrowers compare refinancing options, understand cash flow impacts, and determine if refinancing makes financial sense.

4. Using the Calculator

Tips: Enter the loan amount, annual interest rate (as a percentage), and loan term in years. All values must be > 0.

5. Frequently Asked Questions (FAQ)

Q1: Should I include taxes and insurance in this calculation?
A: No, this calculates principal and interest only. Your actual payment may include escrow for taxes and insurance.

Q2: How does the interest rate affect my payment?
A: Higher rates increase monthly payments. Even a 0.5% difference can significantly impact your payment over 30 years.

Q3: What's the benefit of a shorter loan term?
A: Shorter terms typically have lower rates and save interest, but have higher monthly payments.

Q4: How accurate is this calculator?
A: It provides the exact mathematical calculation, but your actual payment may vary slightly due to rounding or lender-specific practices.

Q5: Does this include refinancing costs?
A: No, this calculates the new monthly payment only. Consider closing costs separately when evaluating refinance benefits.