When interest rates are falling, many people wonder if refinancing their mortgage might lower their monthly mortgage payment or save them interest over the life of the loan. That’s why we created this mortgage refinance calculator to help you understand how much you may be able to save!
This free calculator can help you estimate the benefits of refinancing. For tips on how to use it, see the “how to” instructions below.
How Much Can I Save?
Keep in mind that the Mortgage Calculator merely provides an estimate on how much your mortgage payment will be based on the information you provide. The calculator does not take into account your overall financial situation so your actual rate and payment may be higher.
To get a more precise understanding of the comparative benefits of different loan types, speak with a loan advisor at Freedom Mortgage.
How to use our mortgage refinance calculator
There are default values already entered to show you how the calculator works. To get the most benefit from this tool, update these values with numbers that apply to you. Each time you update a field, the calculator will re-estimate your potential savings. Let’s discuss how the four parts of the refinance calculator work.
To estimate how much you might save by refinancing, the calculator needs to know how much your current mortgage costs. So it asks for the original loan amount, term (which is the number of years you have to pay back the loan), and interest rate. It will also ask how long you have been paying your current mortgage and if there is a balloon payment. When you are finished, click the triangle next to
To estimate potential savings, the refinance calculator also needs information about a new mortgage you might be able to get. Both the new term and new interest rate are important values to input. Note that the term of a new mortgage can have a big impact on how much you might pay each month and how much money you might save on interest over the life of the loan. Input different values for the term to see how the numbers change.
The calculator also includes default values for closing costs like origination fees, discount points, and other services. You can also change these values too. When you refinance, you pay off your current mortgage and replace it with a new one. Many times getting a new loan means you will pay a new set of closing costs. When you are finished, click the triangle next to
The current appraised value of your home (also called its
Taxes & Insurance.
Taxes & Insurance
Finally, the calculator asks you to input payments for property taxes and homeowner’s insurance. Because these costs are part of many people’s monthly mortgage bills, the calculator needs this information to estimate total payments. The calculator includes default values for your tax and savings rate too.
The purpose of our mortgage refinance calculator is to help you decide when it might make sense to explore your refinancing options and talk to lenders. If you would like to talk to our friendly Loan Advisors about refinancing your home loan, please visit our Get Started Page or call 877-220-5533.
Glossary of mortgage refinance calculator terms
Our calculator provides detailed estimates of how much you might save by refinancing your mortgage. Here are quick explanations of some of the information in these estimates.
Amortization and Amortization Schedule
Amortization is the process of repaying a loan by making regular principal and interest payments. An amortization schedule shows the amount a borrower needs to pay in principal and interest each month to ensure the loan is repaid by the end of its term. Our mortgage refinance calculator shows you estimated payment schedules for your current loan and your new loan based on the information you input. To see these estimated schedules, click
Amortization on the slider then click the
SEE TABLE buttons.
A break-even is the point where the savings from a refinance are equal to the closing costs. Our calculator will show you an estimate of how much time it might take you to break even based on the information you input. To see this estimate, click “Break-even Point” on the slider.
Some lenders may require you to pay a fee to get a lower interest rate. (This is also called buying down the rate.) These fees are often called discount points. One discount point is equal to 1% of the loan amount. For example, one discount point would cost $1,000 on a $100,000 loan.
The cost of borrowing money, expressed as a percentage. The interest rate a lender might offer you depends on factors like your credit score, personal finances, and the amount of money you would like to borrow.
These are fees charged by lenders and brokers to process or “originate” a loan. Origination charges can be part of the closing costs of a refinance.
Other settlement services
These can include the costs of home appraisals, title searches, and other services you many need to purchase. These services can be part of the closing costs of a refinance.
Our mortgage refinance calculator estimates the total monthly payments of your current loan and your new loan based on the information you input. Your monthly mortgage bill includes the costs for your principal and interest as well as payments for your property taxes and homeowners insurance. The calculator will show an estimate of your current and new monthly payment. Click the “information icon” to see estimates of the total interest you might pay too.
term of a loan is the number of years you have to pay back the money you borrow. When a mortgage has a term of 30 years, that means you have 30 years to pay off the loan. The term of a mortgage can affect the size of your monthly mortgage payment and the total amount of money you might pay in interest over the life of the loan.
Get started today by getting a personalized evaluation of your home loan options from Freedom Mortgage.