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Mortgage Refinance Breakeven
Will you save money by refinancing now? That depends on a multitude of factors. These factors include your existing interest rate, the current interest rates, closing costs and how long you plan to stay in your home. Use this calculator to sort through the confusion, and determine if refinancing your mortgage is a sound financial decision.

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Definitions
Original mortgage amountThe original amount of your mortgage.
Appraised valueThe appraised value of your home when you purchased it.
Current term in yearsThe total length of your current mortgage in years.
Years remainingThe number of years remaining on your current mortgage.
Income tax rateAn estimate of your current income tax rate. Use the chart below to estimate based on your Federal 2013 taxable income. Information about estimating your state tax rate can be found at http://www.taxadmin.org/fta/rate/ind_inc.pdf.

Filing Status and Income Tax Rates 2013
Tax rate Married filing jointly or Qualified Widow(er) Single Head of household Married filing separately
10% $0 - 17,850 $0 - 8,925 $0 - $12,750 $0 - 8,925
15% $17,850 - 72,500 $8,925 - 36,250 $12,750 - 48,600 $8,925 - 36,250
25% $72,500 - 146,400 $36,250 - 87,850 $48,600 - 125,450 $36,250 - 73,200
28% $146,400 - 223,050 $87,850 - 183,250 $125,450 - 203,150 $73,200 - 111,525
33% $223,050 - 398,350 $183,250 - 398,350 $203,150 - 398,350 $111,525 - 199,175
35% $398,350 - 450,000 $398,350 - 400,000 $398,350 - 425,000 $199,175 - 225,000
39.6% over $450,000 over $400,000 over $425,000 over $225,000

Calculate balanceTo let the calculator determine your remaining balance, based on your original loan information and years remaining, check this box. To enter your own amount, leave this box unchecked.
Current Appraised valueThe current appraised value of your home.
Loan balanceThe balance of your mortgage that will be refinanced.
New interest rateThe annual interest rate for the new loan.
New term in yearsThe number of years for your new loan.
Loan origination rateThis is the percentage of the new mortgage amount that is paid to the lender as the loan origination fee.
Other closing costsEstimate of all other closing costs for this loan. This would include appraisal fees, credit report fees, title charges and any other miscellaneous fees that must be paid.
Points paidThis is the number of points paid to the lender to reduce the interest rate on the mortgage.
Current paymentYour current payment is the sum of principal, interest and private mortgage insurance. Because refinancing does not affect your insurance or taxes they are not included here.
New paymentYour new payment is the sum of principal, interest and private mortgage insurance. Private mortgage insurance is typically required if you will be financing more than 80% of your home’s value and has been estimated at 0.9%. Monthly PMI is calculated by multiplying your starting loan balance by this percent and dividing by 12.
Monthly PMI paymentMonthly cost of Private Mortgage insurance (PMI). For loans secured with less than 20% down, PMI is estimated at 0.9% of your loan balance each year. Monthly PMI is calculated by multiplying your starting loan balance by this percent and dividing by 12.
Monthly PI paymentYour monthly principal and interest payment.
Breakeven monthly payment savingsThe number of months it will take for your monthly payment reduction to be greater than your closing costs.
Breakeven PMI & interest savingsThe number of months it will take for your interest and mortgage insurance savings to exceed your closing costs.
Breakeven total savings after taxThe number of months it will take for your after-tax interest and mortgage insurance savings to exceed your closing costs.
Breakeven total savings vs. prepaymentThis is the most conservative breakeven measure. It is the number of months it will take for your after-tax interest and mortgage insurance savings to exceed both your closing costs and any interest savings from prepaying your mortgage. The prepayment amount used in this calculation is the amount that you would have to spend on closing costs.

This calculator is for illustrative purposes only. The information shown is designed to provide basic information about mortgage financing. Please consult with your tax advisor to determine the tax impact of home ownership and interest deductibility for your individual circumstances.