1. What is Mortgage Refinance Amortization?

Mortgage refinance amortization calculates your new monthly payment when you replace your current mortgage with a new loan. It considers your remaining balance, new interest rate, and loan term to determine if refinancing makes financial sense.

2. How Does the Calculator Work?

The calculator uses the standard amortization formula:

Where:

• \( \text{Balance} \) — Remaining loan principal (USD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (years × 12)

Explanation: The formula calculates the fixed monthly payment required to fully amortize a loan over its term, accounting for both principal and interest.

3. Importance of Refinance Calculation

Details: Accurate refinance calculations help homeowners determine if they can lower monthly payments, reduce interest costs, or change loan terms to better suit their financial situation.

4. Using the Calculator

Tips: Enter your current remaining balance, proposed new interest rate (APR), and desired loan term. All values must be positive numbers (balance > 0, rate between 0-100%, term 1-50 years).

5. Frequently Asked Questions (FAQ)

Q1: When does refinancing make sense?
A: Typically when you can reduce your interest rate by 0.5-1% or change loan terms significantly, but consider closing costs and break-even point.

Q2: How does loan term affect payments?
A: Shorter terms mean higher monthly payments but less total interest. Longer terms lower payments but increase total interest costs.

Q3: Should I include taxes/insurance?
A: This calculator shows principal+interest only. Actual payments may include escrow for taxes and insurance.

Q4: What's not included in this calculation?
A: Closing costs, prepayment penalties, PMI, or changes to escrow amounts aren't factored in.

Q5: How accurate is this calculator?
A: It provides standard amortization results. For exact figures, consult with your lender as terms may vary.