Looking to refinance your home?
Calculate the cost to you by entering the details of your home loan into the refinance calculator below. Refinancing is the alteration of the existing conditions of a loan by acquiring a new loan to pay off the old one.
As with an original home loan, this is a huge decision, and is worth looking into in detail before taking the plunge. Due to the complicated nature of refinancing, this refinance calculator requires the entry of seven different variables so as to offer an accurate estimation of how much you could save.
How to use it
The first figure to enter into the calculator is your current monthly payment, followed by your mortgage balance (that which is outstanding) and years left on your current loan. You then enter the current interest rate you are paying, along with the potential interest rate you could be paying and term of the new loan should you decide to refinance. Finally, enter the estimated cost of refinance, or the total fee paid to your bank or credit union.
The accurate entry of these values will provide a result comprised of your new payment, potential monthly savings, the difference in interest and months it will take to recoup costs.
If the above instructions are not clear, allow us to run through a refinance example. In this example, the currently monthly payment stands at $1,500 with an outstanding mortgage balance of $100,000. The current interest rate being paid is 5%, whereas the interest rate on the new loan will be 4%, so a difference of 1%. The refinanced loan will be the same in length to that remaining on the current loan, so 10 years. And the total cost in fees to complete the refinance will be around £3,000. Clicking on “Calculate” will show that the new monthly payment will be $1,012, so monthly savings of $488. The difference in interest paid comes out at $5,784, and the cost to refinance will take around 6 months to recoup.