1. What is a Refinance Mortgage To Pay Off Debt Calculator?

Definition: This calculator determines the new monthly mortgage payment when refinancing to consolidate additional debt into the mortgage.

Purpose: Helps homeowners evaluate whether refinancing to pay off other debts makes financial sense by showing the new mortgage payment.

2. How Does the Calculator Work?

The calculator uses the standard mortgage payment formula:

Where:

• \( M_{new} \) — New monthly payment (USD)
• \( P \) — Existing mortgage principal (USD)
• \( D \) — Additional debt to consolidate (USD)
• \( r \) — Monthly interest rate (decimal)
• \( n \) — Number of remaining payments

Explanation: The calculator combines your current mortgage balance with additional debt, then calculates the new payment based on the interest rate and loan term.

3. Importance of Refinance Calculations

Details: Proper calculations help determine if refinancing saves money overall, considering both the new mortgage payment and eliminated debt payments.

4. Using the Calculator

Tips: Enter your current mortgage balance, additional debt amount, monthly interest rate (divide APR by 12), and remaining term in months.

5. Frequently Asked Questions (FAQ)

Q1: Should I refinance to pay off debt?
A: Compare your current mortgage payment plus debt payments against the new payment. Also consider closing costs and total interest over time.

Q2: How do I convert APR to monthly rate?
A: Divide your annual percentage rate by 12 (e.g., 6% APR = 0.06/12 = 0.005 monthly rate).

Q3: What's included in "additional debt"?
A: Credit cards, personal loans, auto loans, or any other debts you want to consolidate into your mortgage.

Q4: Does this include refinance closing costs?
A: No, this calculator focuses on payment changes from debt consolidation. Closing costs would typically be added to the loan amount.

Q5: What if I change the loan term?
A: A shorter term increases monthly payments but reduces total interest. Use this calculator to compare different scenarios.