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October 1, 2021 CPAs & Advisors

Should I refinance?

When you refinance at a lower interest rate, you usually pay refinancing costs including points, fees, and closing costs. This calculator will tell you if the amount you save in interest will exceed these refinancing costs. The calculated results depend on how long you plan to keep this property.

All fields are required.

Existing Loan

Original loan amount

Original mortgage length

original term in months or years Months Years

Date of loan

Month loan started Year loan started

Current interest rate

New Loan

Amount you wish to cash out upon refinance

New interest rate

Points

Fees and closing costs

New loan term

new term in months or years Months Years

Other Information

Your income tax rate

Your savings rate (or investment rate of return)

How long you will keep this property

balloon term in months or years Months Years

Graph
Current Payment Schedule
Refinance Payment Schedule

Calculator Results

Refinancing will immediately cost you $5,550.00 to cover the loan origination fees. It will take 47 months before the savings in interest offsets the origination fees. If you plan to stay at this property for 15 years, you will save $9,787.32.

Financial Details

Loan Info	Current Loan	Refinance	Savings
Monthly Payment	$2,321.60	$2,236.42	$85.18
Origination Cost		$5,550.00	($5,550.00)
Total Loan Cost (PV)	$480,567.44	$470,780.12	$9,787.32

Calculator tips

In this analysis, cash out is not considered as part of the cost of the loan since the cash could theoretically be put back into the loan.

Your tax rate is used to calculate the monthly advantage of your interest deduction. If you wish not to include the interest deduction advantage, you may set your tax rate to 0. Please keep in mind that your tax deduction may be limited beyond the scope of this calculator. Talk to your tax advisor before using these results in your specific situation.

The total loan cost figure is actually the present value of all the payments for as long as you keep this property, using the investment rate of return as a discount rate. You may also think of it as the amount you would have to invest today (e.g., in a savings account) to cover all the payments for as long as you keep this property. Negative savings are indicated by brackets.

Calculator disclaimer

The information provided by these calculators is intended for illustrative purposes only and is not intended to purport actual user-defined parameters. The default figures shown are hypothetical and may not be applicable to your individual situation. Be sure to consult a financial professional prior to relying on the results.