Mortgage Refinance Calculator

Net Position — Your total financial advantage (or disadvantage) from refinancing at any point in time. Calculated as: Out-of-Pocket Differential + Payment Differential + Balance Differential.

Out-of-Pocket Differential — The net out-of-pocket impact of the transition window: Cash to Close or Cash Back, plus Escrow Balancing, plus Skipped Payments (P&I+PMI only). A positive number means you came out ahead at closing.

Payment Differential — The cumulative difference in payments made. If you've paid less on the new loan than you would have on the old loan, this is positive.

Balance Differential — The difference in remaining balances (Current Balance − New Balance). If the new loan has a lower balance, this is positive because you owe less.

Break-Even — The payment number when your Net Position first reaches zero. Before this point, you're still "in the red" from refinancing costs.

5-Year Savings — Your net position after 60 payments (5 years). This is a practical milestone that shows whether your refinance is paying off within a typical ownership timeframe. Tap this card to explore how your savings change over time.

Potential Savings — Shows your best potential lifetime savings across three approaches: Apples-to-Apples (equalize payments), Oranges-to-Oranges (equalize payoff dates), and Standard (no extra payments). Tap to compare all three options.

Lifetime Savings — Shown when Apples-to-Apples mode is active and the new payment is lower than the old payment. Reflects total savings when the monthly difference is applied as extra principal on the new loan.

Transparent Savings — A relabeled version of Potential Savings shown when the most honest comparison requires constraints — either because the new payment is higher than the old one, or because you brought voluntary cash to closing that must be accounted for on both sides. The number reflects what you'd actually save under a fair, equalized comparison rather than the theoretical maximum.

Monthly Savings — The difference between your old total payment (P&I + PMI) and your new total payment. Shown in standard mode when the new payment is lower.

Payments Saved — In Apples-to-Apples mode, the number of payments eliminated by applying your monthly savings as extra principal. If your new payment is higher, this shows how many fewer payments you'd make by paying that higher amount on both loans.

Suspense Balance — Funds your servicer is holding in a holding account that haven't been applied to your loan yet, typically from a partial payment or an unposted extra principal payment. It shows as a credit on your payoff statement, reducing the net amount owed dollar-for-dollar.

Deferred Principal Balance — A portion of your loan balance that has been deferred, typically through a loan modification. It carries 0% interest and no monthly payment, but the full amount is due as a balloon payment when you refinance or sell.

Down Payment Assistance (DPA) Lien — A second mortgage used to fund part of your down payment. It may be forgiven over time, repaid over time, or due as a balloon payment at refinance or sale. The full remaining balance is always included in your refinance payoff amount.

Forgiven Second Lien — A second mortgage where a fixed amount is forgiven each month until the balance reaches zero. If you refinance before the forgiveness period ends, the remaining balance is due at closing.

Payoff Amount — The total your current lender requires to fully close out your existing mortgage. This is higher than your current loan balance because it includes unpaid interest that has accrued since your last payment, a recording fee to release the lien, and any escrow adjustments.

Unpaid Interest — Interest that has accrued on your old loan from your last payment date through the payoff date. Because mortgages are paid in arrears (your payment covers the prior month's interest), there is always a gap of accrued interest owed at payoff.

Prepaid Interest — Interest on your new loan from the day it funds through the end of that month. It's collected at closing so there's no gap before your first regular payment. Closing later in the month means fewer prepaid days and a lower amount.

Cash to Close / Cash Back — The total amount shown on your Closing Disclosure. "Cash to Close" means you're bringing money to closing (a cost); "Cash Back" means you're receiving money at closing (a benefit, typically from a cash-out refinance).

Principal Reduction — An optional one-time extra principal payment made with your first payment, typically funded by cash back from the refinance. This reduces your loan balance immediately rather than giving you cash at closing.

Escrow Funding — The initial deposit into your new escrow account, calculated from a 14-month projection to ensure adequate funds for upcoming tax and insurance payments plus the required cushion.

Escrow Balancing — The net effect of transitioning your escrow account from the old loan to the new one. Taxes and insurance are costs you owe regardless of which loan you carry, so the escrow transition is a timing adjustment rather than a true cost of refinancing. A positive number means the old-loan escrow obligation was absorbed into the new loan (a benefit); a negative number means an escrow overage was applied to your payoff instead of being returned to you (a cost).

Skipped Payments — The mortgage payments you don't make between your last old-loan payment and your first new-loan payment. Only the P&I and PMI portions count as a benefit — taxes and insurance are homeownership costs you owe regardless, so they're accounted for separately in escrow balancing.

LTV (Loan-to-Value) — Your loan balance expressed as a percentage of the property's value. LTV = Loan Balance ÷ Home Value. It determines whether PMI is required and when it can be removed.

P&I — Principal & Interest. The base mortgage payment that goes toward your loan balance and interest charges.

PMI — Private Mortgage Insurance. Required on conventional loans when equity is below 20%, typically drops off automatically when the balance reaches 78% of the original purchase price (old loan) or current appraised value (new loan).

MIP — Mortgage Insurance Premium. Required on FHA loans regardless of equity. For loans with LTV > 90% at origination, MIP is required for the life of the loan. For LTV ≤ 90%, MIP drops after 11 years.

Apples-to-Apples (A2A) — Equalizes monthly payments between both loan scenarios. If the new payment is lower, the savings go to extra principal on the new loan. If the new payment is higher, that higher amount is paid on both loans, with the difference going to extra principal on the old loan.

Oranges-to-Oranges (O2O) — Equalizes payoff dates by calculating the extra principal needed on the new loan to pay it off when your old loan would have ended. Shows the true monthly cost difference when both loans retire at the same time.