Mortgage Refinance Calculator
Calculate new monthly payments, interest savings, and break-even point on your refinance
Additional Information and Definitions
Refinance Loan Amount
New loan principal after refinance
Old Monthly Payment
Your current monthly payment on the old mortgage
New Interest Rate (%)
Annual interest rate for the refinanced loan
Loan Term (months)
Number of months for the refinanced loan
Closing Costs
Total fees due at refinance closing
Extra Payment Amount
Additional monthly payment beyond required amount
Extra Payment Frequency
Choose how often you make extra payments
Smart Refinance Decisions
Estimate potential savings with updated interest rates and extra payments
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Refinance Terms Explained
Understand the key calculations for your mortgage refinance
Break-Even Point:
The number of months it takes for your monthly savings to exceed the total closing costs of refinancing.
Closing Costs:
Fees associated with refinancing, typically 2-5% of the loan amount, including appraisal, origination, and title fees.
Cash-Out Refinance:
Refinancing for more than you owe and taking the difference in cash, often used for home improvements or debt consolidation.
Rate-and-Term Refinance:
Refinancing to change your interest rate, loan term, or both, without taking additional cash out.
Monthly Savings:
The difference between your old and new monthly payments after refinancing.
Total Cost Comparison:
The difference in total costs between keeping your existing loan and refinancing, including all fees and remaining payments.
Points:
Optional upfront fees paid to lower your interest rate, where one point equals 1% of the loan amount.
Remaining Term:
The number of months left on your current mortgage before refinancing.
Net Present Value (NPV):
The current value of all future savings from refinancing, accounting for the time value of money.
5 Refinancing Gotchas That Could Cost You Thousands
Think you've found the perfect refinance deal? Before you sign, watch out for these often-overlooked factors that could turn your savings into expenses:
1.The 30-Year Reset Trap
Rolling your 20-year mortgage back to 30 years might feel great with lower payments, but do the math: an extra decade of payments could cost you £100,000+ in interest. Smart move: Keep your current timeline or shorter, and put those payment savings toward principal instead.
2.The Escrow Account Surprise
Your quoted £200 monthly savings might vanish when property taxes spike or insurance rates climb. Real-world example: A £400,000 home with 10% higher property taxes could add £100+ to your monthly payment, regardless of that attractive new interest rate. Always get an updated escrow analysis before deciding.
3.The Self-Employment Timing Dilemma
Recently switched to self-employment or changed jobs? Most lenders want 2 years of steady income history. Even high earners get denied for 'inconsistent income.' Pro tip: If career changes are coming, refinance first or prepare for extensive documentation and possibly higher rates.
4.The Hidden Credit Score Penalty
Just one missed payment or high credit card balance can drop your score 40+ points. On a £300,000 loan, this could mean a rate 0.5% higher, costing you £30,000 extra over the loan. Secret weapon: Check (and clean up) your credit report 3-6 months before refinancing.
5.The Rate Lock Gamble
Rates can jump 0.25% in a single day. On a £400,000 loan, that's £20,000 in lost savings over 30 years. Some borrowers lost dream rates in 2022 by waiting just one week too long. Smart strategy: Lock your rate when the savings make sense, and consider paying for a longer lock period in volatile markets.