📉 Refinance Calculator

What is the Mortgage Refinance Calculator?

This calculator is a financial modeling tool designed to help you determine if **refinancing your current mortgage is financially worthwhile**. It achieves this by comparing the costs and interest paid under your existing loan terms against the estimated costs and interest of a new loan offer.

Why You Need This Tool and Its Purpose

Refinancing involves paying closing costs, which can offset your monthly savings. The core purpose of this tool is to identify the crucial **Break-Even Point** and quantify your savings:

1. **Find the Break-Even Point:** This is the number of months required for your monthly payment savings to equal the one-time closing costs. If you plan to sell the house before this point, refinancing is often a financial loss.
2. **Quantify Long-Term Savings:** See the total interest dollars you save over the remainder of the loan term.
3. **Compare Options:** Easily model the impact of changing the new loan term (e.g., switching from a 30-year to a 15-year) alongside the interest rate change.

How This Calculator Works

The calculator performs a two-stage amortization analysis:

1. **Baseline Cost:** It calculates the **Original Monthly Principal & Interest (P&I) Payment** and the **Total Interest** that would be paid over the entire remaining term of your current loan.
2. **New Loan Cost:** It calculates the **New P&I Payment** and the **Total Interest** paid over the new, typically shorter, loan term. It also factors in the new **Loan Amount** (Current Balance + Cash Out, if any).
3. **Comparison:** The **Monthly Savings** is the difference between the old P&I and the new P&I. The **Break-Even Point** is calculated as: $$\text{Break-Even Months} = \frac{\text{Closing Costs}}{\text{Monthly Payment Savings}}$$