ToolBox CS
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This calculator computes how long it takes to recover the closing costs incurred when refinancing a mortgage, as well as the estimated savings from refinancing (including the difference in total interest to be paid on the new loan compared to the interest remaining to be paid on the existing loan).
Example
How much interest can be saved by refinancing a home loan?
| Field | Input |
|---|---|
| Year | 2018 |
| Month | September |
| Current loan field | Input |
|---|---|
| Month loan originated | February |
| Year loan originated | 2001 |
| Original loan amount | $250,000 |
| Term of loan | 30 years |
| Interest rate | 6.50% |
| Federal and state tax rate | 35% |
| Is interest deductible? | Yes |
| New loan field | Input |
|---|---|
| Are closing costs added to loan? | No |
| Term of loan | 15 |
| Interest rate | 4.125% |
| Other closing costs | $4,000 |
In this example, the net savings from refinancing is $19,569.00. In addition, the difference in monthly payment is reduced $254 and the Number of months to recover closing costs equals 16.
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