1. What is the Refinance Loan Comparison Calculator?

The Refinance Loan Comparison Calculator helps you determine whether refinancing a loan will save you money by comparing your current loan costs with potential refinance costs.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( Old\ PMT \) — Original monthly payment amount (USD)
• \( Remaining\ Months \) — Months remaining on original loan
• \( New\ PMT \) — New monthly payment amount (USD)
• \( New\ Months \) — Term length of new loan in months
• \( Fees \) — Closing costs and fees for refinancing (USD)

Explanation: The formula calculates your total remaining payments on the original loan versus the total payments plus fees for the new loan.

3. Importance of Refinance Comparison

Details: Proper refinance analysis helps you make informed financial decisions by quantifying potential savings or costs, considering both monthly payments and loan terms.

4. Using the Calculator

Tips: Enter all values in USD. Include all closing costs in the Fees field. Positive results indicate savings, negative results indicate additional costs.

5. Frequently Asked Questions (FAQ)

Q1: What's considered a good refinance savings amount?
A: Typically, you want at least 1-2% interest rate reduction and savings that recoup fees within 24 months.

Q2: Should I include taxes and insurance in the payment amounts?
A: No, use only principal and interest payments for accurate comparison.

Q3: How accurate is this calculator?
A: It provides a basic comparison but doesn't account for time value of money or potential tax implications.

Q4: What if my new loan term is shorter?
A: The calculator will show higher monthly payments but may reveal long-term savings from paying less interest.

Q5: Should I refinance if the savings are minimal?
A: Consider your break-even point (fees divided by monthly savings) and how long you plan to keep the loan.