1. What is a Refinance Mortgage Calculator?

Definition: This calculator estimates your monthly mortgage payment when refinancing, based on loan amount, interest rate, and loan term.

Purpose: It helps homeowners determine potential savings and payment changes when considering refinancing options.

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 Refinance Calculations

Details: Accurate payment calculations help determine if refinancing makes financial sense by comparing current and potential payments.

4. Using the Calculator

Tips: Enter your loan amount, current or expected interest rate, and desired loan term. All values must be > 0.

5. Frequently Asked Questions (FAQ)

Q1: Should I include taxes and insurance?
A: This calculator shows principal and interest only. For full PITI payment, add estimated taxes and insurance.

Q2: How does refinancing save money?
A: Lower rates reduce monthly payments and/or loan term. Compare your current payment with refinanced options.

Q3: What's a good refinance rate?
A: Rates vary by location (geo), credit score, and market conditions. Compare with current national averages.

Q4: How does loan term affect payment?
A: Shorter terms have higher payments but less total interest. Longer terms lower payments but increase total cost.

Q5: Should I refinance to a different term?
A: Consider your goals: lower payment (longer term), faster payoff (shorter term), or cash-out needs.