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Refinance calculator in the US

A refinance calculator helps to make a preliminary calculation of choice for a specific refinance program, evaluate the overpayment and your capabilities, and choose a repayment period. It allows one to repay the loan with the least burden on the family budget.

The best refinance calculator
Loan amount
i

Specify the desired loan amount

USD
USD
1000 $
100000 $
Loan term
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Specify the desired length of the loan for calculation

months
days
1
120
Interest rate
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Choose the interest rate on the loan

1 %
60 %
Type of payments
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The calculation of loan repayments depends on the selected type of payment

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Submit one loan application online!

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What is Loan Refinancing?

Loan refinancing is when a borrower takes a new loan in order to pay back the existing one. Terms and conditions of loan refinancing vary depending on a lender and the loan type. Refinancing makes sense to take for mortgages, student loans, and car loans.

If your loan is tied to collateral, it can be transferred to a new loan. Usually, borrowers rely on refinancing when they can take a new loan on more beneficial loan terms. Borrowers who make on time payments can improve their credit score, so they may qualify for a better loan. However, the debt replacement can occur under financial distress. It is known as debt restructuring and is needed to reduce delinquent debts.

Loan Types You Can Refinance

Mortgage Refinance

When you take mortgage refinancing on your house, you trade this house in your existing mortgage for a new one. Your mortgage lender uses the new loan for monthly mortgage payments on an existing mortgage. Therefore, you only end up with one mortgage.

There are a few reasons to refinance the mortgage. You may want to reduce your monthly mortgage payment. A borrower can take cash-out refinance to make use of your home equity. Cash-out refinance is basically when the mortgage gets replaced with a new loan amount exceeding the amount of a previous loan. It helps a borrower to get additional cash. You can also opt for rate-and-term refinances to get lower interest rate and lower monthly mortgage payments.

If you take mortgage refinance while having less than 20% of home equity, you will be required to pay mortgage insurance. If you already pay mortgage insurance, it won't affect you. Yet, if a house has decreased in value since its purchase, the homeowners will have to pay mortgage insurance for the first time they refinance.

If you take your mortgage from the Federal Housing Administration, you will pay a mortgage insurance premium. You can pay it up-front or as a part of your mortgage balance. Therefore, your payments will be larger.

Student Loan Refinance

Student loans can be a difficult to repay even if you got the loan on competitive interest rate. If your credit score and credit history improved over time, you can opt for refinance your student loan. Once you decided on a refinance lender, you need to evaluate interest rates on a refinanced loan so you can save money on a new loan. Depending on a personal loan program, you can both save on interest and monthly payments.

Car Loan Refinance

Auto loans usually require down payment in a particular percent of your car's purchase price. Once you paid it, there is a loan amount you need to cover. If your credit score improved over time, you can be eligible for a lower annual percentage rate loan. Even if your new loan has a higher total monthly payment, you can still benefit from car loan refinancing by paying it off earlier. Higher-interest debts, on the other hand, can cost more and may not be suitable for you.

What Are the Reasons to Refinance a Loan?

Loan refinancing can be a good option to improve the loan terms. No matter what loan type you are trying to refinance, it should make your loan repayment easier. The most common reason borrowers decide to refinance their loans are:

What is a Refinance Calculator?

Refinance calculator can help to assess the value of refinancing a loan. Using a refinance calculator, you can compare monthly payments on your existing loan and the payments on a new one.

Mortgage refinance calculator is a refinance calculator for a particular type of loan. If you are going to refinance your mortgage, you need to plan the expenses so you can meet the repayment schedule. It especially matters because a mortgage takes your house as collateral, and the lender may repossess it.

Why You Need a Refinance Calculator

Calculating Loan Refinancing Manually

To assess the benefits of loan refinancing and whether to take it, you can calculate a payback period. It is defined as a number of months to cover the costs of refinancing. To calculate a refinance loan duration, you need to divide the cost of refinancing by the monthly savings. This way is easier, however, it doesn't allow a borrower to compare the loans thoroughly.

Better calculate a payback duration considering monthly savings and the change in loan balance. The total benefit of refinancing is the cumulative change in repayments and the change in the loan balance. The month in which the benefit outweighs the cost of refinance represents the payback duration.

To understand the concept better, consider a $50,000 loan amount at 5% interest rate on 25 years loan term. Monthly payment for such a loan is $292.30. If you want to refinance it into a 15-year loan at 3% interest rate, the monthly payment for which will be $345.29. The cost of refinance will be $650.

Here, the payment on the new loan is higher than the current monthly payment. So, a payback calculation won't work in this situation. You will need to conduct extensive calculations to compare the difference in payments and the difference in loan amount left.

Refinance Calculator

The calculator helps you assess the refinance savings much quicker. The tool does everything for you. You will need to fill in the fields, first for your current loan, and then for a new loan.

Take the above example: fill in the current monthly payment, current loan interest rate, balance left on a loan, and the remaining loan term. Then fill in the data on a new loan: a new interest rate and a new loan term.

The calculator states you would pay $52.99 more each month and interest savings will be $25,538. So, if your goal is to lower your monthly payments, this refinancing option won't suit you. However, if you prioritize interest rate savings, this option is good.

Mortgage refinance calculator estimates mortgage refinancing options considering home value, mortgage points, and property taxes.

If the refinance loan reduces both the monthly payment amounts and the interest rate, you can totally take this option.

If you will save on interest rate but will get a higher monthly payment, you can shorten the loan term and pay more principal with each payment. However, your loan term gets shorter, so you will pay less interest.

How to Compare Lenders using Calculator

In general, to take the best refinancing option and reduce your current loan balance, you need to pay attention to interest rates and loan duration. If your goal is to make lower payments, pick the lenders with lower interest rate and longer term. If you want to save on interest payments, pick those with lower interest rate and shorter term.

Once you decided on a few suitable lenders, compare every option by filling them in the calculator. The tool will assess the savings, and you can choose the best loan for refinancing.

How do you calculate if it is worth to refinance the loan?

You need to calculate the total closing costs and fees of your loan, then divide it with your monthly savings. This way, you will determine the number of months it takes to cover the costs of refinancing your loan.

How much can I borrow when refinancing?

Generally, the loan amount varies from lender to lender and the loan type, as well as depends on your financial situation and credit records. In case of a mortgage, you can usually take about 80% of the home's value. However, VA loans allow a borrower to take the total value of equity.

Is 3% worth refinancing?

In general, it is considered good your refinance rate saves at least one percent. Even one percent is a significant reduction. It can generate substantial monthly savings.

What is the formula for refinancing?

The refinancing formula for the cost id closing cost plus fees, points, and taxes.