NYC Mortgage Refinance Calculator

When does it make sense to refinance your mortgage? Refinancing a mortgage means paying off your existing loan and replacing it with a new one. Use our mortgage refinancing calculator to quickly and easily determine if refinancing today can save you money.

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  • You will lose money if you refinance and keep your loan for less time than the break-even point.
  • You will save money if you refinance and keep your loan longer than the break-even point.

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Should You Refinance Your Mortgage?

Refinancing your mortgage allows you to pay off your current home loan in full to get a new one. Suppose interest rates have decreased since you initially closed your existing mortgage. In that case, refinancing allows you to lower your monthly payment or use some of the equity in your home for other purposes. If interest rates increase, you can keep your existing mortgage and enjoy the satisfaction of paying lower rates while new home buyers face higher interest rates.

Average Interest Rate for 30-Year, Fixed-Rate Mortgages

Years ago, when mortgage rates plummeted, people worried that the economy of the United States was heading into another recession. The Federal Reserve stepped in and made getting approved for a mortgage easier to prevent a recession. However, today, we are again looking at a recession soon, and interest rates have begun to increase.

The more robust economy and uncertainties elsewhere have investors worldwide putting their money into safe American assets, including bonds packaged with government-sponsored mortgage products from Freddie Mac and Fannie Mae.

Refinancing Rule of Thumb

When interest rates are lower, many homeowners take advantage of moving to a different type of mortgage to pay their home off sooner. For example, if you can pay the same or close to the same amount of money per month on a 15-year mortgage as your current 30-year mortgage, refinancing to the shorter term to pay off your home sooner would make sense.

Refinancing fees vary from lender to lender but are often in the thousands of dollars and include origination fees and property appraisal fees, much like you paid for the original mortgage. If your goal of refinancing your mortgage is to decrease your payment, look for rates at least one percentage point lower than what you currently pay for your mortgage. This rule of thumb holds even when considering the closing costs and other fees associated with the refinancing.

You might consider refinancing even if the rate isn’t a whole percentage point lower if you intend to stay in your home for many more years. Even small monthly savings over a long period will justify refinancing costs.

Try our calculator to see what kind of savings you might experience. Just plug in your numbers and let the tool tell you your potential savings.

As with any significant financial decision, you must consider individual needs. Analyze the pros and cons carefully and seek professionals’ wisdom before applying for a mortgage refinance.