1. What is the Refinance Comparison Calculator?

The Refinance Comparison Calculator helps you determine the potential savings when refinancing a loan by comparing your old monthly payment with the new proposed payment.

2. How Does the Calculator Work?

The calculator uses a simple formula:

Where:

• \( \Delta PMT \) — Monthly payment difference
• \( Old\ PMT \) — Current monthly payment amount
• \( New\ PMT \) — Proposed monthly payment after refinancing

Explanation: The equation calculates the absolute difference between your current payment and the new payment to show potential savings.

3. Importance of Payment Comparison

Details: Comparing payments before and after refinancing helps determine if refinancing makes financial sense, considering both short-term savings and long-term costs.

4. Using the Calculator

Tips: Enter your current monthly payment and the proposed new payment after refinancing. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What does a positive Delta PMT mean?
A: A positive value means you'll save money each month by refinancing.

Q2: Should I only consider monthly savings when refinancing?
A: No, also consider closing costs, loan term changes, and total interest over the life of the loan.

Q3: How accurate is this calculator?
A: It provides exact payment differences but doesn't account for fees or changes in loan terms.

Q4: Can I use this for any type of loan?
A: Yes, it works for mortgages, auto loans, student loans, and other installment loans.

Q5: What if my new payment is higher?
A: The calculator will show a negative value, indicating increased monthly costs.