Mortgage Refinance Calculator

Comparing the Loans

Keep / Refinance

Keep is your current loan if you don't refinance, followed from the new loan's first payment date; Refinance is the new loan.

Standard

Each loan is paid its own scheduled payment, with no extra principal on either: your new payment against today's. It shows when both comparison cards are off, and its end figure is called Net Position at payoff.

Apples-to-Apples (A2A)

What if you kept making your current payment on the new loan? Both loans get the same monthly payment while both are being paid, and the difference goes to extra principal on whichever loan has the lower payment; once one loan is paid off, the other goes back to its own payment. Cash you put into the refinance beyond what you'd pay anyway (not counting a tax reserve, which comes back to you) goes to your current loan as a matching lump sum, so both paths spend the same money; it's the benchmark. When the refinance pays off debts with payments of their own, the same payment is what keeping would pay each month: today's, falling as each debt would have been paid down, so the extra falls too.

Oranges-to-Oranges (O2O)

The new loan's payment is raised so it pays off when your current loan would (same payoff date as your current loan; debts the refinance pays off may have run longer), showing what matching your current payoff date costs or saves each month. It's offered only when the new loan would otherwise end later; otherwise its card says Not needed.

Net Position at payoff

The Standard comparison's Net Position once both loans (and any debts the refinance pays off) are paid off: the End of the chart.

Escrow

The part of your payment held for property taxes and homeowner's insurance. What Changed? shows the same balanced amount for both loans (a twelfth of a year's taxes and insurance), since those bills don't change with the loan.

Total Payment

What Changed?'s bottom line: P&I + PMI/MIP + the payments on other debts the refinance pays off + escrow.

The Headline Figures

Monthly Savings

Your current monthly principal & interest plus mortgage insurance (and the payments on other debts the refinance pays off), minus the new loan's, in the first month. Escrow is the same on both loans, so it's left out. It changes when mortgage insurance or a debt's payment ends, and with Oranges-to-Oranges on, the new payment includes its extra principal. Tap it for a chart of the saving at every payment.

Payments Saved

Shown instead of Monthly Savings when Apples-to-Apples is on: how many fewer payments the new loan takes than your current loan when both get the same monthly payment while both are being paid (once one is paid off, the other goes back to its own payment). A red "+" figure means the refinance takes that many more payments.

Lower Payment Lasts

When the refinance pays off debts with payments of their own, today's payment counts them only until each would have been paid off, so the lower payment falls as they end (and every month with a card paying its minimum). The Monthly Savings card says how long the first month's figure lasts; tap it to see what is left of it as each debt ends, and from which payment keeping your current loan would cost less each month.

5-Year Savings

Your Net Position at payment 60 (about five years after your first new payment) in the comparison shown, or at the last payment if the comparison ends sooner. Tap it to open the chart, which shows every month.

Potential Savings

The third headline card's name when the page shows the Standard comparison. It gives the Apples-to-Apples lifetime savings, the benchmark. Tap it to compare Apples-to-Apples, Oranges-to-Oranges (when offered) and Standard, and switch to any of them. When the Apples-to-Apples figure needs a condition to be fair, the window starts by saying which: you put cash into the refinance beyond the payoff and costs (how much, and where it comes from; as much of it as your current loan still owes goes to that loan), the new payment is higher (so both loans get the higher payment), or another comparison shows more.

Lifetime Savings

The Net Position once both loans are paid off, under Apples-to-Apples or Oranges-to-Oranges. Each comparison card shows its figure, and the headline card uses this name when Apples-to-Apples or Oranges-to-Oranges is on; its window says what keeps the Apples-to-Apples figure fair, as under Potential Savings. (The Standard comparison's end figure is called Net Position at payoff.)

Break-Even

The first payment at which your Net Position reaches zero or more in the comparison shown ("At closing" if it already does at closing, "Never" if it doesn't within the loan). It can drop back below zero later, for example when the new loan runs longer than your current loan would, so check the 5-Year Savings and the end of the chart too.

Net Position

Net Position

How far ahead (or behind) refinancing leaves you at a given payment, counting both cash and equity: roughly what you'd have more or less if you sold then. Net Position = Out-of-Pocket Differential + Payment Differential + Balance Differential.

Out-of-Pocket Differential

Cash in or out of your pocket between your current loan and the new loan's first payment, compared with keeping your current loan. It adds up cash to close (or cash back), an appraisal paid outside closing, the escrow shortage, the lien release recording fee, skipped payments and any suspense funds (plus the lump sum with Apples-to-Apples). Positive means refinancing leaves you more cash.

Escrow Shortage

What your new escrow account needs at closing (the escrow deposit, and any insurance premium, tax installment and tax reserve collected at closing) less what your current escrow account has at payoff. Apart from any tax reserve (refunded to you after the tax bill is paid), it's money for tax and insurance bills you pay either way. Neither is a cost of refinancing, so the Out-of-Pocket Differential counts it back, though the interest on any part your new loan pays is a cost. When your current escrow balance is refunded to you after closing (not applied to the payoff or to your new loan's principal), the line is Escrow Shortage & Refund: everything the escrow items need is paid at closing, and the refund comes back to you after closing. When your balance is more than the escrow items need, the line is Escrow Balance Beyond the Shortage: your own money going toward the payoff (or your new loan's principal), counted like cash you bring to closing.

Skipped Payments

The monthly payments due on neither loan between your last payment on your current loan and the new loan's first payment. The principal & interest and mortgage insurance you don't pay (plus the other debts' payments) count as cash kept. They aren't free money: the interest for those months is in the payoff and the new loan's prepaid interest.

Suspense Balance

Money your servicer is holding but hasn't applied to your loan, usually from a partial payment or unposted extra principal. It's credited at payoff. On your current loan it would have gone to your next payment, so it's counted back in the Out-of-Pocket Differential.

Apples-to-Apples Lump Sum

With Apples-to-Apples on, the cash you put into the refinance beyond what you'd pay anyway and beyond a tax reserve (which comes back to you), also applied to your current loan's principal so both paths spend the same money. It's credited back in the Out-of-Pocket Differential.

Payment Differential

What you would have paid on your current loan minus what you pay on the new loan, added up month by month. It counts principal & interest and mortgage insurance (plus the payments on other debts the refinance pays off), not escrow. Positive means you've paid less by refinancing. With Apples-to-Apples it reads "Equalized" while both loans get the same payment.

Balance Differential

What you'd still owe keeping your current loan (including the other debts the refinance pays off) minus what you owe on the new loan, at the same payment. Positive means you owe less by refinancing; it often starts below zero when costs are rolled into the new loan.

How We Got Here

How We Got Here

The Costs tab's ledger from your current loan balance to your cash to close (or cash back): each line adds or takes off an amount, with the running total beside it. Payoff, Needed at closing and Cash to close (or Cash back) are its totals. Tap a line to see where it comes from; what it shows adds up to the line.

Payoff

What it takes to close out your current loan: your balance at closing plus unpaid interest to the payoff date, the lien release recording fee, any mortgage insurance owed, a negative escrow balance and any other debts the refinance pays off, less any escrow balance applied, suspense funds or interest credit. It's usually more than your balance, and it's How We Got Here's first total.

Unpaid Interest

Interest your current loan builds up after the period your last payment covered, through the payoff date. Each payment covers the previous month's interest, so this is owed at payoff. If the payoff falls in a month your last payment already paid for, the unused part comes back as an Interest Credit.

Lien Release Recording Fee

The county fee to record the release of your current lender's lien (estimated at $88 unless entered). It's in the payoff, but you'd pay it either way: selling your home or paying off your current loan releases the lien too. So it's counted back in the Out-of-Pocket Differential, not as a cost of refinancing.

Escrow Balance Applied / Negative Escrow Balance

Your current escrow balance at payoff (your statement's, plus the escrow in payments made before closing, less bills paid from it and anything your current lender holds back), used to lower the payoff; or, when the account is below $0, the amount below $0, added to the payoff. Either way it counts in your escrow shortage.

Closing costs & fees

The fees to get the new loan (origination, points, appraisal, title, recording and similar, plus an FHA upfront premium or VA funding fee). When they're estimated, How We Got Here lists each one; with figures from a Loan Estimate or Closing Disclosure, it's what your Cash to Close leaves after everything else. An appraisal paid before closing isn't in it, since it isn't in the loan; tap the line to see the total with it.

Appraisal (POC)

An appraisal fee paid before closing, outside the loan. It's counted as an out-of-pocket cost; tap Closing costs & fees in How We Got Here to see the total with it.

Prepaids & escrow

The lines between Closing costs & fees and Needed at closing: prepaid interest, the escrow deposit and any taxes, insurance or tax reserve collected at closing. Apart from prepaid interest, this is your own money: for bills you owe anyway, or a tax reserve that is refunded to you after the tax bill is paid.

Needed at closing

How We Got Here's second total: the payoff plus closing costs & fees, prepaid interest, the escrow deposit and any taxes, insurance or tax reserve collected at closing. Your new loan amount comes off it; what's left is your cash to close (when the loan is more than what's needed, the difference is your cash back).

Prepaid Interest

Interest on your new loan from the funding day to the end of that month, collected at closing. If your first payment is due the month right after funding, it already covers the whole funding month, so the days before funding come back as a Prepaid Interest Credit (closing later means a bigger credit).

Escrow Deposit

The first deposit into your new loan's escrow account, collected at closing. It is enough for your monthly escrow payments to cover the taxes and insurance due over the next 14 months and still keep the required cushion (at most 2 months). With figures from a Loan Estimate or Closing Disclosure, the deposit it shows is used when it is entered. It's your money for your bills, not a cost of the refinance. How We Got Here shows how it's sized: the cushion, plus what your payments won't have built up by the bill when the account would be lowest.

Tax Installment / Insurance Premium

A property tax installment or homeowner's insurance renewal due within 60 days of funding (or before the first payment), collected at closing so the new escrow account doesn't have to pay it.

Tax Reserve

The extra the title company holds on top of a tax installment collected at closing (1.25 or 1.5 times the installment in all, or another amount), usually because the new tax bill isn't out yet. It's refunded to you after the tax bill is paid, so it isn't a cost of the refinance; when your new loan pays it, the interest on it is.

Cash to Close / Cash Back

What you bring to closing (Cash to Close) or receive at closing (Cash Back), from page 1 of your Loan Estimate or Closing Disclosure, or estimated from the costs. Cash back is borrowed money, not a saving: it makes the new loan larger, and you can apply it to principal instead.

After Closing

After Closing

What happens after closing: principal reductions made with your first payment, the escrow refund from your current lender, and money the title company holds to pay taxes or insurance due soon.

Principal Reduction

A one-time extra payment toward the new loan's balance, made with your first payment, from money you would otherwise keep: your cash back, your escrow refund and/or the cash from your skipped payments. It appears in the After Closing box and lowers the new loan's balance instead of adding to your cash.

Escrow Refund

Your current escrow balance, sent back by your current lender after payoff (when it isn't applied to the payoff), less anything it holds back for bills due soon. You can apply it to principal instead.

Held back / Paid from escrow

Part of your escrow balance your current lender keeps to pay a tax or insurance bill due soon after funding (held back), or uses to pay one due before funding, before the payoff (paid from escrow); either way it makes your escrow refund, or the escrow balance applied to your payoff, smaller, and your escrow shortage larger.

Debts Paid Off

Additional Debt Payoff

Other debts this refinance pays off at closing, added to the Payoff: a second lien, credit cards, a car, student or personal loan. Keeping your current loan you'd go on paying them, so their payments count in the monthly savings and the Payment Differential, and what you'd still owe on them in the Balance Differential, until each would be paid off.

Paying Off Your Debts

The panel under the headline figures when the refinance pays off a credit card or another loan and paying them off is what it's mainly for (Step 1b asks): when you'd be debt-free, the average rate on what you owe, the debts' interest, where the 5-Year Savings come from, and the life of the loan at the new loan's own payment (its Net Position at payoff). The summary above says how much lower the payment is, and the Monthly Savings card how long that lasts.

Debt-Free, Same Budget

When you'd owe nothing, paying what you pay today on your loan (with its mortgage insurance) and these debts every month either way (or the new payment with its mortgage insurance, if that's more): not the lower new payment the summary quotes. Each path's mortgage insurance is paid out of that amount while it is charged, as Apples-to-Apples counts it. Keeping your loan, each debt's payment goes on and what's freed as each is paid off goes to the highest-rate debt left, then to your loan; refinancing, all of it goes to the new loan.

Average Rate on What You Owe

Your current loan's rate and each debt's, weighted by balance, against the new loan's rate. It weighs each balance by its size only, not by how long it would be owed: a card paid off in a few years counts as much as a mortgage with decades to run. So a lower average doesn't mean the refinance costs less, and it isn't shown as good or bad; the Net Position says whether you come out ahead.

Interest on These Debts

The interest the debts would cost paying them as you do now, against their share of the new loan's interest at its regular payment over its whole term.

Monthly Payments

The view on the Savings tab (when the refinance pays off debts) showing what each path pays every month: keeping your loan, its payment steps down as each debt would be paid off; the new loan's stays level. Green where the refinance is the lower payment, red where keeping is. A deferred or forgivable balance due once your loan is paid off is marked as a one-time payoff, with its amount, not drawn as a monthly payment.

Other Debt Payments

What Changed?'s row for the monthly payments on the debts the refinance pays off: what you pay on them now, and "Paid off" on the new loan.

Credit Card Minimum Payment

When a card's payment is the minimum, the analysis takes it as the interest plus the same share of the balance as today's payment, never under $25: it falls as the balance does, so the card takes longer to pay off than at a fixed payment.

Second Lien

A second loan against your home that this refinance pays off (it's part of the Payoff), such as down payment assistance, a deferred balance, a soft second or a forgivable loan. It can be deferred, forgiven over time, or repaid over time with its own monthly payment (What Changed?'s 2nd Lien Payment row).

Deferred Balance

A second lien with no interest and no monthly payment (often a loan modification's deferred principal), due in full when the home is sold or refinanced or the first mortgage is paid off. Refinancing pays it off; keeping your loan, it stays owed.

Forgivable Second Lien

A second lien that shrinks by an even amount each month until nothing is owed. Refinancing pays off what's left at closing, so you give up the rest of the forgiveness; keeping your loan, the balance keeps falling.

Loan Basics & Mortgage Insurance

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 on a conventional loan with less than 20% equity, paid monthly. The analysis ends it when the balance reaches 78% of the home's value when the loan was made (Original Value for your current loan, Current Home Value for the new one). VA loans have none.

MIP

FHA's mortgage insurance: an upfront premium (UFMIP, financed into the loan) plus an annual premium paid monthly. For FHA loans made since June 2013, the monthly MIP lasts the life of the loan if the LTV at origination was over 90%, or 11 years at 90% or less.

UFMIP / UFMIP refund

FHA's upfront premium, 1.75% of the base loan, financed into the loan amount. Refinancing FHA into FHA within 36 months refunds part of the current loan's upfront premium: it comes off the new base loan, so the new loan and its premium are both smaller.

VA funding fee

A one-time VA fee financed into the loan: 0.5% for an IRRRL (VA to VA), otherwise 2.15% on first use or 3.3% after. Veterans receiving VA disability pay are exempt.

Funding (disbursement) date

The day the new loan funds and your current loan is paid off (for a refinance, usually 3 business days after signing). It sets the unpaid and prepaid interest.

Payoff Planner

Payoff Planner

A separate tool for the new loan alone: the extra payment that pays it off by a target date, and the interest that saves. It is not part of the Net Position comparison.

Interest Saved

In the Payoff Planner, the interest you avoid by paying the new loan off sooner. In the Oranges-to-Oranges window (Interest Saved vs. Keep), the interest left on your current loan (and on the debts the refinance pays off) minus the new loan's interest, with the new loan paid off when your current loan would be.