Refinance Calculator

Times change, and so do our financial needs. The interest rate you had going into your mortgage may not be as good as the current rate. You may want to alter the terms of your mortgage. Whatever your needs may be, you can always address them through mortgage refinancing. The question is, how do you know if it’s time to refinance or not?

What is a refinance calculator?

A refinance calculator can help you determine if refinancing is an ideal option to suit your financial situation. This calculator aims to show you if it’s viable for you to refinance by asking the following details about your mortgage:

  • Property value
  • Current mortgage balance
  • Current mortgage rate
  • Length of term remaining
  • Mortgage payment (weekly, bi-weekly, monthly, etc.)
  • Prepayment penalty (if applicable)

That above data is input into the calculator and the results will let you know if you should refinance.

Why do people refinance their mortgage?

There are four common factors involved in mortgage refinancing.

  1. Lower interest rate: A lower rate means more money in your pocket. The less you pay in interest, the more money you can put towards your mortgage and the more you can save.
  2. Term changes: Refinancing allows you to change the terms of your mortgage. When you first acquired the loan, you may have needed ample time to pay it back. Now, you may be in a better financial position (through a pay raise, commissions, etc.) to pay back your mortgage faster. On the contrary, you may need to increase the terms of your mortgage because of income loss.
  3. Equity release: When you look at your home, you probably see a place to raise your family. What you should be seeing is dollar signs. Releasing the equity in your home and turning it into cash, is a great way to pay off revolving debt like credit cards and implement those home renovations you’ve been putting off for years.
  4. Going from fixed to variable (or vice versa): Refinancing can help you move from a variable rate mortgage to a fixed one (or the other way around). A fixed rate mortgage may have made sense before but a shift in the market can make it less appealing. The same goes for a variable rate mortgage.

Should I meet with a mortgage broker to refinance?

Yes. A mortgage broker is adept at helping your negotiate the new terms of your mortgage and finding you a better interest rate. A refinance calculator can only tell you if refinancing is ideal, but it cannot actually do the refinancing for you.

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