Your statement should also show this breakdown. If part of your monthly payment also goes toward escrow (to cover property taxes and homeowners insurance), you should check your mortgage statement to see the exact portion that goes toward principal and interest. This can be found on your latest mortgage statement.Ĭurrent monthly payment: Includes only the payments you make toward principal and interest each month. To get the most precise estimates from our mortgage refinance calculator, you’ll need some information about your current mortgage and your potential new loan.īelow are the key pieces of information you’ll need and where to find them.Ĭurrent loan balance: Refers to the remaining principal balance on your existing loan. Refinance calculator terms and definitions You can spend money you get from a cash-out refi on anything, but some of the best uses include home improvements, debt consolidation, paying for college education, or buying another property. The bigger loan amount is first used to pay off your existing loan, and the ‘extra’ is returned to you as cash. With a cash-out refinance, your new loan amount is higher than your current mortgage balance. If you have enough equity in your home, you may be able to do a cash-out refinance. This way, you’d pay the principal off faster and save money on interest in the long run without committing to a shorter-term loan’s higher monthly payments. Then, you can take the money you’re saving and use it to “prepay” your mortgage by paying a little extra each month. If the higher payments on a shorter loan term are too high for your budget, there are other ways to pay off your mortgage early.įor instance, you might refinance to a better interest rate and lower your monthly payments. But you’ll likely pay less interest over the life of the loan because you are making fewer payments.Īnd shorter loan terms, like a 15-year fixed mortgage, usually offer lower interest rates than a longer-term loan. In most cases, shortening your mortgage term will allow you to pay the loan off faster.Ī shorter term often means you’ll have a higher monthly payment. But keep in mind that a shorter loan term results in higher monthly payments. Replacing a 30-year mortgage with a 15-year loan, for example, can save a lot in interest. Homeowners can also choose a shorter mortgage term when they refinance.
Or if you have an FHA loan and you want to stop paying mortgage insurance, you may be able to refinance to a conventional loan that does not require private mortgage insurance. Your new loan can reflect your current financial life instead of reflecting your needs as they were when you took out the original mortgage.įor example, if you have an adjustable-rate mortgage (ARM) and the interest rate is about to increase, you can change to a more stable fixed-rate mortgage with your refinance loan. Refinancing gives you a chance to choose a different loan type. A refinance could also help you save thousands of dollars in interest over the life of your loan. If today’s rates are lower than the rate on your current loan, refinancing could substantially reduce your monthly mortgage payments. Getting a lower interest rate is by far the most popular reason to refinance a home loan. Here’s a look at some of the most common reasons to consider refinancing. See today’s mortgage rates, AugRefinance Calculator Should I refinance my mortgage?Īre you trying to decide whether to refinance your remaining mortgage loan amount? To get a more accurate number, request estimates from lenders so you can see how low of an interest rate and payment you qualify for. Keep in mind this calculator provides an estimate only your new monthly payment may be different from what’s shown. Use this mortgage refinance calculator to estimate how much a new loan could save you. Refinancing is usually worth it if you’ll save money over the life of your loan. Mortgage Refinance Calculator: Should You Refinance?
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