Refinance calculators, also called mortgage calculators, are typically easy to use and readily available for free on the Internet. To use a refinance calculator, you may want to gather the necessary information first. You'll typically need to know your loan balance, current monthly payment, current interest rate, and the length of time left on your mortgage loan. Additionally, you may need to provide an estimate of the new loan balance, new interest rate, and new loan term. This information can be entered into the refinance calculator to generate new monthly payment amounts. Using the calculator typically takes just minutes.
Refinance calculators are typically available on most mortgage company websites. They typically require similar information, but some may offer additional features. For example, some calculators will offer comparisons of interest rates between competing companies. This type of calculator typically produces a range of possible monthly payments based on the various interest rates offered.
You also can use a refinance calculator to determine if you can afford to refinance. For example, most calculators not only calculate what your monthly payments will be, but also how many payments you'll need to make before you break even on whatever closing costs you many have had to pay. They typically also will show how much money you can expect to save each month if you refinance — or how much more money you'll have to pay if the refinancing will ultimately cost you more money.
A refinance calculator may also show you how you can save even more money. For example, many calculators will show how much your mortgage will cost if paid over the course of the stated term, such as 30 years; they also may show how much your mortgage will cost if you double up on payments and pay off the mortgage early — this can result in significant saving in interest paid. It is important to add in any early repayment fees or fines that may be part of your mortgage contract to get an accurate calculation.
Doubling up isn't the only way to reduce your overall mortgage cost. Some calculators also can show the difference between making the standard monthly payment and paying bi-weekly. For example, if your monthly mortgage payment is $1,000 US Dollars (USD), instead of paying $1,000 USD per month, you'd pay $500 USD every other week. Good refinance calculators will calculate the difference you'll end up paying in interest over the term of the loan, which is usually a significant savings.