Refinance payment change
Refinance Payment Change Calculator
Compare your current mortgage payment with a refinanced one side by side. Include closing costs, discount points, cash out, PMI, and escrow to see the real change in your monthly payment, when the refinance pays for itself, and what it does to lifetime cost.
Example Use
Example: refinancing a $310,000 balance from 7.25% with 26 years left to 6.1% on a new 30-year loan with $5,500 in closing costs lowers principal and interest by about $330 a month. The costs are recovered in about 17 months, but the new 30-year term adds four years of payments, which is why the lifetime cost line matters.
What this calculator adds to a basic refinance check
A simple refinance calculator compares two interest rates. Real refinances also change the loan amount, the term, mortgage insurance, and the cash you bring or take at closing. This calculator puts those pieces together so the payment change you see is the one you would actually feel.
Your property taxes and homeowners insurance usually do not change because you refinance, so they appear in both payments. Including them keeps the totals comparable to your current mortgage statement.
Rolling costs into the loan vs. paying them at closing
Paying closing costs and points in cash keeps the new loan smaller and the payment lower, but you need the cash, and the break-even date is how long it takes monthly savings to earn that cash back.
Rolling costs into the loan means little or no cash at closing, but you borrow the costs and pay interest on them for the life of the loan. Tick the roll-in box to compare both approaches. When costs are rolled in, the lifetime cost line is a better measure than break-even.
Why a lower payment can still cost more
Refinancing into a new 30-year loan when you have 20 or 26 years left restarts the clock. The payment drops partly because of the lower rate and partly because you are spreading the balance over more years. The lifetime cost difference shows whether the rate savings outweigh the extra years of payments.
If you want the lower rate without adding years, try a new term equal to your remaining years, such as 25 or 20. Many lenders offer custom terms. You can also keep a 30-year loan and pay extra toward principal.
Cash-out refinances and PMI
Taking cash out raises the new loan amount, and with it the payment and the loan-to-value ratio. For conventional loans, mortgage insurance is generally required when the loan is above 80% of the home value, so the calculator adds estimated PMI when the new LTV crosses that line.
Going the other way, a refinance can remove PMI if your home has gained value and the new loan is at or below 80% LTV. Enter your current PMI to see that savings included in the payment change.
FAQs
How do I calculate my new mortgage payment after refinancing?
Start with the new loan amount: your current balance plus any cash out and any costs you roll in. Then apply the new rate and term to get principal and interest, and add PMI if required plus your taxes and insurance.
What is a good refinance break-even?
It depends on how long you will keep the loan. If you expect to stay well past the break-even month, the refinance has time to pay off. If you might sell or refinance again sooner, a shorter break-even matters more.
Are discount points worth it?
Points lower the rate in exchange for cash up front. They make the most sense when you will keep the loan long enough for the lower payment to repay the points. Compare scenarios with and without points.
Will refinancing change my escrow payment?
Usually not directly, because your taxes and insurance stay the same. The new servicer may run a fresh escrow analysis and ask for an initial escrow deposit at closing.
Does this include the old loan's escrow refund?
No. When your old loan is paid off, the old servicer refunds any remaining escrow balance, typically within a few weeks. That refund can offset part of the new escrow deposit.
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