Breakeven is the point of zero profit and zero loss. To find out whether refinancing of current mortgage is cost-effective or not, one should take a view on the duration to reach the breakeven point. This calculator is committed to find out the period of time you need to wait to get to the breakeven point. Using original and new loan amount, appraised value, interest rate, loan terms, and outstanding time to pay off the loan, OKCalculator will find out the monthly payments so that you can compare and take decision.
Original mortgage amount
Dollar amount of the original mortgage.
The value of your property as assessed by loan provider. This is closer to the market value of the asset.
Current term in years
Term duration of the original mortgage expressed in years.
Number of outstanding years on the original mortgage loan.
If you don’t know the remaining balance, simply check this box and the calculator will find out the value of remaining loan balance.
Current appraised value
Value of the mortgaged property as appraised currently.
Portion of the mortgage value you want to refinance.
New interest rate
Rate of interest that will be charged on the new loan.
New term in years
The term length (in years) for the refinancing.
The percentage rate (normally 1%) charged by the loan underwriter as origination fee of the new loan.
Other closing costs
Filing fees, misc. Fees, appraiser fees and any other closing costs.
The amount of money paid as principal, interest, and Loan Mortgage Insurance (LMI). This amount must not include any tax or insurance costs.
Total amount of principal, LMI, and interest payable on the new mortgage.
Monthly LMI payment
Cost incurred every month for LMI or Loan Mortgage Insurance. If your cash down is not more than 19%, you need to pay 0.5% yearly on the loan balance. When this yearly amount is divided by twelve, you will get the monthly LMI. Interestingly, you don’t need to pay for LMIs when your contribution to equity becomes higher than required rate for LMI.
Monthly PI payment
The sum of principal and interest paid monthly.
Breakeven monthly payment savings
Number of remaining months after which the monthly payment reduction will exceed the closing costs.
Breakeven LMI & interest savings
Number of remaining months after which the LMI and interest savings will exceed the closing costs.
Breakeven total savings vs. prepayment
Number of remaining months after which the LMI and after-tax interest savings will exceed the closing cost plus prepayment savings. This is a more conservative approach of measuring breakeven.