Refinance Calculator Inputs
Example Data Table
| Scenario | Balance | Current Rate | New Rate | Costs | Estimated Monthly Savings |
|---|---|---|---|---|---|
| Lower rate refinance | $250,000 | 6.75% | 5.95% | $5,750 | $145.22 |
| Shorter term refinance | $180,000 | 6.40% | 5.80% | $4,200 | Payment may rise |
| Cash out refinance | $300,000 | 7.10% | 6.25% | $7,500 | Depends on cash out |
Formula Used
The calculator uses the standard fixed-rate mortgage payment formula:
M = P × r / (1 - (1 + r)^-n)
M is the monthly principal and interest payment. P is the loan principal. r is the monthly interest rate. n is the number of monthly payments.
Refinance costs are calculated as closing costs plus discount points plus prepayment penalties. Discount points are estimated as a percentage of the new base loan amount.
Break even months are calculated with this formula:
Total refinance costs ÷ monthly savings.
Lifetime savings compare estimated interest on the current loan with estimated interest on the new loan.
How to Use This Calculator
- Enter your current loan balance, rate, and remaining term.
- Add your property value to estimate equity and loan to value.
- Enter the new refinance rate, new term, and expected costs.
- Add points, penalties, cash out, and escrow amounts if needed.
- Choose whether costs are paid upfront or added to the new loan.
- Press the calculate button to view savings and break even results.
- Download the CSV or PDF report for your records.
Refinance Planning Guide
Why Refinancing Needs Careful Review
A refinance can lower your payment, shorten your payoff time, or help you access home equity. Yet it is not always the best move. A lower rate can still cost more when fees are high. A longer term can reduce monthly pressure but increase total interest. This is why a full comparison matters before you apply.
Look Beyond the New Rate
Many borrowers focus only on the advertised interest rate. That can be risky. Closing costs, points, escrow changes, and loan term changes affect the final result. This calculator includes these details so you can compare real payment impact. It also shows whether the monthly savings recover the refinance costs.
Understand Break Even Timing
Break even timing is one of the most useful refinance checks. It tells you how many months are needed to recover costs through monthly savings. If you plan to sell soon, a long break even period may not help. If you will keep the home longer, the refinance may become more useful.
Review Equity and Cash Out
Cash out refinancing can increase your new loan balance. It may also raise your loan to value ratio. A higher ratio can affect pricing, approval, and mortgage insurance needs. Use the property value field to check your estimated equity after refinancing. This helps you avoid borrowing more than planned.
Use Results as Estimates
The results are planning estimates. Real lender quotes may include different fees, credits, taxes, escrow rules, and underwriting conditions. Compare official loan estimates before making a decision. Also review your budget. A refinance should support your cash flow, payoff goals, and long-term financial plan.
FAQs
1. What does this refinance calculator estimate?
It estimates new payments, monthly savings, break even time, refinance costs, interest savings, equity, and loan to value. It is built for planning only. Actual lender results can change after credit checks, underwriting, and official fee disclosures.
2. Is this calculator affiliated with Wells Fargo?
No. This calculator is an independent educational tool. It can help users compare refinance scenarios, but it does not represent Wells Fargo rates, approvals, fees, offers, or official loan terms.
3. What is a refinance break even point?
The break even point shows how long monthly savings take to recover refinance costs. For example, if costs are $4,000 and monthly savings are $200, the break even point is 20 months.
4. Should I roll closing costs into the new loan?
Rolling costs can reduce upfront cash needs. However, it increases the new loan balance. That can raise interest paid over time. Compare both options before choosing.
5. Why does a lower rate sometimes save less?
A lower rate may come with high costs or a longer term. Those changes can reduce savings. Always compare total interest, monthly payment, and break even timing together.
6. What are discount points?
Discount points are upfront charges paid to reduce the interest rate. One point often equals one percent of the loan amount. This calculator estimates points as a percentage of the new base loan.
7. Does cash out affect refinance savings?
Yes. Cash out increases the new loan balance. That can increase the payment and total interest. It may still be useful when the borrowed cash supports a clear financial goal.
8. Are taxes and insurance required?
No. They are optional in this calculator. Add them when you want a broader monthly housing payment comparison. Leave them at zero to compare only principal and interest.