- Higher term lowers payments, raises total interest.
- Financing costs increases loan amount and interest paid.
- Higher cash-out increases LTV and payment.
Example data table
| Field | Example | Notes |
|---|---|---|
| Current payoff balance | $250,000.00 | Remaining principal |
| Cash-out amount | $30,000.00 | Funds taken from equity |
| Closing costs | $6,000.00 | Fees before credits |
| Points | 1.00% | Based on base loan |
| Lender credits | $1,500.00 | Reduces costs |
| New rate / term | 6.25% / 30 | Rate is annual |
| Property value | $400,000.00 | Used for LTV |
| Monthly taxes + insurance | $550.00 | Optional total monthly view |
Formula used
The monthly principal-and-interest payment uses the standard amortization formula:
- L = loan amount (payoff + cash-out + financed costs).
- r = monthly interest rate = (annual rate / 100) / 12.
- n = total number of monthly payments (years × 12).
If the rate is 0%, payment becomes L / n.
How to use this calculator
- Enter your current payoff balance and your new rate and term.
- Add cash-out, closing costs, points, and any lender credits.
- Choose whether to finance costs or pay them upfront.
- Optionally enter property value and max LTV to check eligibility.
- Add monthly taxes, insurance, HOA, and PMI for a total payment.
- Press Calculate to view results above the form.
- Download CSV or PDF to save or share outputs.
Payment drivers: rate, term, and loan size
A $300,000 loan at 6.25% for 30 years pays about $1,847 monthly P&I. At 6.75% it is about $1,946, and at 7.25% about $2,047. Shortening to 15 years raises payment to about $2,572, but cuts lifetime interest from about $364,975 to about $163,008. Even a 0.50% rate change can move payments roughly $100 per month on this balance.
Cash-out and closing cost mechanics
Start with payoff $250,000 and cash-out $30,000, for a base $280,000. With $6,000 closing costs, 1.00% points ($2,800), and $1,500 credits, net costs are $7,300. Financing them makes the new loan $287,300; paying them upfront keeps the loan $280,000 but lowers cash received to $22,700. At 6.25% for 30 years, financing adds about $44.95 per month and roughly $8,881 interest over the term.
LTV guardrails and PMI risk
Loan-to-value is new loan divided by property value. Using $287,300 on a $400,000 home gives about 71.83% LTV, under an 80% cap. If value is $350,000, LTV rises to about 82.09%, which can trigger PMI, pricing hits, or underwriting limits. Because LTV depends on appraisal, include a buffer if values are uncertain or volatile.
Total monthly payment composition
Total monthly payment includes P&I plus taxes, insurance, HOA, and PMI. If P&I is $1,768.96 and taxes plus insurance are $550, total is about $2,318.96. Adding a $150 HOA lifts it to about $2,468.96. In early months, interest dominates: on $287,300 at 6.25%, first-month interest is about $1,496, so principal is roughly $273.
Interpreting outputs and next steps
Use the change in total monthly to judge cash-flow impact. A $200 increase is $2,400 per year. If net cash received is $30,000, a simple payback is 12.5 years before tax effects. Review total interest, LTV warnings, and export the schedule for planning. Compare against alternatives like a shorter term, smaller cash-out, or a second-lien loan when rates differ. Re-run scenarios to see how points, credits, and escrow items reshape affordability and risk.
FAQs
What loan amount does the calculator use?
It starts with payoff balance plus cash-out. If you finance costs, it adds closing costs and points minus credits. The resulting amount is used for the amortized payment.
How are points and lender credits treated?
Points are calculated as a percent of the base new loan. Lender credits reduce total costs. Costs never go below zero in the estimate.
Should I finance closing costs or pay them upfront?
Financing costs usually increases payment and lifetime interest. Paying upfront reduces net cash received. Compare both scenarios using the monthly change and the total-interest outputs.
What if the new interest rate is 0%?
If the rate is zero, the payment becomes loan amount divided by months. The schedule still shows balance declining evenly.
How is LTV calculated, and why does it matter?
LTV equals new loan amount divided by property value. Higher LTV can increase pricing, require PMI, or limit eligibility. Use the max LTV field as a quick check.
Does the total monthly payment include taxes and insurance?
Yes, total monthly adds your entered taxes, insurance, HOA, and PMI to P&I. If you want a pure loan comparison, focus on the P&I figures.