Mortgage Refinance Calculator

It’s about saving you money

The Mortgage Refinance Calculator can really help you keep control of what for many people is the biggest expenditure they have. You must do all you can to get a good deal.

If you enter the following details into the calculator it will help you work out what your mortgage is costing you and the amount you could save by moving to a better deal.

Prerequisites

Using the Mortgage Refinance Calculator will assist you in evaluating the best deal and will work out the difference that is made by a lower interest rate. It will give you a payment schedule timeline as to how long it will take to clear the debt; a monthly payment; and it will calculate the savings you will make with different deals and competing interest rates.

Remember to check deals for any ‘hidden’ charges – early redemption charges; penalties for overpayment; administration fees for the product. These charges sometimes get added to your balance, which means you end up paying interest on them too. Be careful. If a good headline interest rate comes with a product fee of, for example, $1500, and that gets added to the balance so that you do not have to pay the fee at the time, you will pay interest on that money for as long as the mortgage is running.

Be sure to put any additional costs into the calculator too, so get an accurate monthly payment figure.

Why Refinance?

Refinancing is about saving you money and benefiting your overall financial position. It can have short term, medium term and long term benefits. Usually, you will want to refinance for a lower rate and to pay less overall, but sometimes you may want to refinance to lessen how much you are paying per month and you may do so by extending the term of the loan. Be aware that this can increase the amount you will pay overall, but it may be necessary if your financial situation changes.

In effect, when you change deals or refinance – even with the same provider on a different deal – you are paying off one loan and taking out another. Nowadays, however, the admin is usually smooth, so you will hopefully not find it a stressful process.

Ask yourself the following questions to guide you as to whether refinancing is worth looking into.

• Question 1. Have interest rates fallen?
• Question 2. Am I on a fixed rate mortgage or a standard variable rate mortgage?
• Question 3. How long do I have left on my mortgage?

If you have a long time left on your mortgage and still a high debt then refinancing to a lower rate could save you tens of thousands in interest over the years.

• Question 4. Has my credit rating changed?

If it has got better, you should really check whether this improves the deal you can get. Lenders assess individual risk when they lend. If you are now a safer bet, you will possibly get a lower rate and better terms.

• Question 5. Can I/we really afford the payments we are making, or is life too tight and stressful? If so, lowering your monthly rate could help you live better and be worth the slower rate of debt decrease.

Almost all of these questions are about you. But use the Mortgage Refinance Calculator to help you weigh up the pros, cons, and opportunities. The broad rule of thumb to work to is usually – ‘Can I pay less overall and reduce both my overall interest payments and monthly payments?’ But sometimes you have different priorities at different times of life.

In summary, use the Mortgage Refinance Calculator to help you decide what is right for you.