Calculator inputs
Use the fields below to model payment changes, equity access, and cash-out refinancing.
Example data table
Use this sample scenario to test the calculator and review how each input affects the refinance estimate.
| Input | Example value |
|---|---|
| Home value | $450,000 |
| Current mortgage balance | $260,000 |
| Current rate | 6.75% |
| Remaining current term | 23 years |
| New refinance rate | 5.95% |
| New refinance term | 30 years |
| Closing costs | $6,500 |
| Cash-out request | $25,000 |
| Annual taxes | $5,400 |
| Annual insurance | $1,800 |
| Monthly HOA | $95 |
| Target LTV | 80% |
Formula used
Equity = Home Value − Mortgage Balance
New Loan = Current Balance + Cash-Out + Financed Closing Costs
LTV = (Loan Amount ÷ Home Value) × 100
Payment = P × r × (1 + r)n ÷ ((1 + r)n − 1)
Break-Even = Closing Costs ÷ Monthly Savings
Available Equity = (Home Value × Target LTV) − Current Balance − Financed Costs
Taxes, insurance, HOA, and PMI are included in the monthly carrying-cost comparison. Optional extra principal shortens payoff time in the refinance schedule.
How to use this calculator
- Enter your current home value and remaining mortgage balance.
- Add your current interest rate and remaining loan term.
- Enter the proposed refinance rate and new term length.
- Add closing costs, cash-out amount, and your target LTV.
- Include taxes, insurance, HOA, and PMI for fuller estimates.
- Choose whether closing costs are financed or paid upfront.
- Add optional extra monthly principal to test faster payoff.
- Submit the form and review results, graph, and amortization preview.
FAQs
1. What does refinance equity mean?
It is the portion of your home value you still own after subtracting the mortgage balance. A refinance can preserve, reduce, or tap that equity through cash-out proceeds.
2. What is a good target LTV for refinancing?
Many lenders prefer lower LTV ratios because they reduce risk. Ratios at or below 80% often offer better pricing and may avoid PMI, though lender rules vary.
3. Why can a lower rate still increase total interest?
A refinance can extend the loan term. Even with a lower rate, paying for more years can increase lifetime interest. Always compare total interest, not only monthly payment.
4. How is cash-out different from rate-and-term refinancing?
Cash-out refinancing replaces your existing loan and gives you additional money from home equity. Rate-and-term refinancing usually changes pricing or term without pulling equity out.
5. Should I finance my closing costs?
Financing costs lowers upfront cash needed, but it increases your loan balance and may raise interest paid over time. Paying costs upfront preserves more equity.
6. Why does the calculator estimate PMI?
PMI may apply when the projected refinance LTV exceeds 80%. This estimate helps compare carrying costs more realistically, especially for higher-leverage refinance scenarios.
7. What does break-even month mean?
It estimates how long monthly savings may take to offset closing costs. If monthly savings are small or negative, the refinance may not reach a useful payment break-even.
8. Can extra payments help after refinancing?
Yes. Extra principal lowers the outstanding balance faster, reduces total interest, and can shorten the repayment period. This calculator models that effect in the refinance schedule.