1. What is a 30-Year Fixed Refinance?

A 30-year fixed refinance replaces your existing mortgage with a new loan that has a fixed interest rate for 30 years. This calculator helps estimate your new monthly payment when refinancing.

2. How Does the Calculator Work?

The calculator uses the standard amortization formula:

Where:

• \( PMT \) — Monthly payment (USD)
• \( PV \) — Loan amount (USD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• 360 — Total number of payments (30 years × 12 months)

Explanation: The formula calculates the fixed monthly payment required to fully amortize the loan over 30 years.

3. Importance of Payment Calculation

Details: Understanding your potential new payment helps determine if refinancing makes financial sense by comparing to your current payment and considering closing costs.

4. Using the Calculator

Tips: Enter the loan amount in USD and the annual interest rate as a percentage (e.g., 3.5 for 3.5%). Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What costs aren't included in this calculation?
A: This calculates principal and interest only. Your actual payment may include property taxes, insurance, and PMI if applicable.

Q2: How does refinancing save money?
A: Savings come from lower interest rates, reduced monthly payments, or switching from adjustable to fixed rates.

Q3: What's the break-even point for refinancing?
A: Divide closing costs by monthly savings to find how many months until you recoup refinancing costs.

Q4: Are there prepayment penalties?
A: Most modern loans don't have prepayment penalties, but check your specific loan terms.

Q5: When does refinancing make sense?
A: Generally when you can reduce your rate by 0.5-1% or change loan terms beneficially, and plan to stay in the home long enough to break even.