QuantumCalcs.com

Refinance Calculator

Calculate your potential savings when refinancing a loan

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Refinancing Analysis Results

Current Monthly Payment
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New Monthly Payment
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Monthly Savings
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Total Interest Savings
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Break-Even Period
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Savings Comparison

How Refinancing Calculation Works

This calculator helps you estimate potential savings when refinancing a loan by comparing your current loan terms with new proposed terms.

Formula used: Monthly Payment = P × [r(1+r)^n] / [(1+r)^n - 1] where P is principal, r is monthly interest rate, and n is number of payments.

The calculator estimates your monthly payment savings and total interest savings over the life of the loan. It also calculates the break-even period - how long it will take for your monthly savings to cover the closing costs of refinancing.

Remember that this calculation doesn't include all potential fees or tax implications. For a comprehensive analysis, consider consulting with a financial advisor.

Frequently Asked Questions

What is refinancing?
Refinancing involves replacing your current loan with a new one, typically to secure a lower interest rate, reduce monthly payments, change the loan term, or access equity in your property.
Should I include closing costs in the calculation?
Yes, including closing costs gives you a more accurate picture of your true savings. Closing costs typically range from 2% to 5% of the loan amount and can include appraisal fees, origination fees, title insurance, and other expenses.
What is a break-even period?
The break-even period is the time it takes for your monthly savings to equal the closing costs of refinancing. If you plan to stay in your home longer than the break-even period, refinancing is generally beneficial.
When does refinancing make sense?
Refinancing typically makes sense when you can secure an interest rate at least 0.5% to 1% lower than your current rate, plan to stay in your home long enough to reach the break-even point, and can afford the closing costs without significantly impacting your finances.

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