The coronavirus pandemic has had a significant impact on the financial health of individuals and the U.S. economy at large.
Is there a possible silver lining? The economic effects of public policy could provide an opportunity to save on your mortgage. The federal government’s efforts to encourage home buying as a means of stimulating the economy has kept interest rates relatively low.
A lower interest rate could mean a lower monthly payment.
While the listing price and down payment help determine the amount of the loan, the interest rate will determine how much of the monthly mortgage payment will go towards interest.
Even a slight change in your interest rate can result in significant savings, and can make an expensive purchase more affordable or help refinancing make more financial sense.
Consider the following refinance example
Closing costs for refinancing will typically be 3-6% of your new loan amount, so how long you plan to keep your home is essential.
A $ 280,500 30-year fixed-rate loan has an interest rate of 4.2% (APR 4.302%) was taken out in April 2014. It probably requires a monthly payment of ~ $ 1,371.69 in principal and interest combined.
| Month | Balance | Payment | Principal | Interest |
|---|---|---|---|---|
| April 2014 | $280500.00 | $1371.69 | $389.94 | $981.75 |
| May 2014 | $280110.06 | $1371.69 | $391.30 | $980.39 |
| June 2014 | $279718.76 | $1371.69 | $392.67 | $979.02 |
| July 2014 | $279326.09 | $1371.69 | $394.05 | $977.64 |
| August 2014 | $278932.04 | $1371.69 | $395.43 | $976.26 |
| September 2014 | $278536.61 | $1371.69 | $396.81 | $974.88 |
| October 2014 | $278139.80 | $1371.69 | $398.20 | $973.49 |
| November 2014 | $277741.60 | $1371.69 | $399.59 | $972.10 |
| December 2014 | $277342.01 | $1371.69 | $400.99 | $970.70 |
| January 2015 | $276941.02 | $1371.69 | $402.40 | $969.29 |
| February 2015 | $276538.62 | $1371.69 | $403.80 | $967.89 |
| March 2015 | $276134.82 | $1371.69 | $405.22 | $966.47 |
| April 2015 | $275729.60 | $1371.69 | $406.64 | $965.05 |
| May 2015 | $275322.96 | $1371.69 | $408.06 | $963.63 |
| June 2015 | $274914.90 | $1371.69 | $409.49 | $962.20 |
| July 2015 | $274505.41 | $1371.69 | $410.92 | $960.77 |
| August 2015 | $274094.49 | $1371.69 | $412.36 | $959.33 |
| September 2015 | $273682.13 | $1371.69 | $413.80 | $957.89 |
| October 2015 | $273268.33 | $1371.69 | $415.25 | $956.44 |
| November 2015 | $272853.08 | $1371.69 | $416.70 | $954.99 |
| December 2015 | $272436.38 | $1371.69 | $418.16 | $953.53 |
| January 2016 | $272018.22 | $1371.69 | $419.63 | $952.06 |
| February 2016 | $271598.59 | $1371.69 | $421.09 | $950.60 |
| March 2016 | $271177.50 | $1371.69 | $422.57 | $949.12 |
| April 2016 | $270754.93 | $1371.69 | $424.05 | $947.64 |
| May 2016 | $270330.88 | $1371.69 | $425.53 | $946.16 |
| June 2016 | $269905.35 | $1371.69 | $427.02 | $944.67 |
| July 2016 | $269478.33 | $1371.69 | $428.52 | $943.17 |
| August 2016 | $269049.81 | $1371.69 | $430.02 | $941.67 |
| September 2016 | $268619.79 | $1371.69 | $431.52 | $940.17 |
| October 2016 | $268188.27 | $1371.69 | $433.03 | $938.66 |
| November 2016 | $267755.24 | $1371.69 | $434.55 | $937.14 |
| December 2016 | $267320.69 | $1371.69 | $436.07 | $935.62 |
| January 2017 | $266884.62 | $1371.69 | $437.59 | $934.10 |
| February 2017 | $266447.03 | $1371.69 | $439.13 | $932.56 |
| March 2017 | $266007.90 | $1371.69 | $440.66 | $931.03 |
| April 2017 | $265567.24 | $1371.69 | $442.20 | $929.49 |
| May 2017 | $265125.04 | $1371.69 | $443.75 | $927.94 |
| June 2017 | $264681.29 | $1371.69 | $445.31 | $926.38 |
| July 2017 | $264235.98 | $1371.69 | $446.86 | $924.83 |
| August 2017 | $263789.12 | $1371.69 | $448.43 | $923.26 |
| September 2017 | $263340.69 | $1371.69 | $450.00 | $921.69 |
| October 2017 | $262890.69 | $1371.69 | $451.57 | $920.12 |
| November 2017 | $262439.12 | $1371.69 | $453.15 | $918.54 |
| December 2017 | $261985.97 | $1371.69 | $454.74 | $916.95 |
| January 2018 | $261531.23 | $1371.69 | $456.33 | $915.36 |
| February 2018 | $261074.90 | $1371.69 | $457.93 | $913.76 |
| March 2018 | $260616.97 | $1371.69 | $459.53 | $912.16 |
| April 2018 | $260157.44 | $1371.69 | $461.14 | $910.55 |
| May 2018 | $259696.30 | $1371.69 | $462.75 | $908.94 |
| June 2018 | $259233.55 | $1371.69 | $464.37 | $907.32 |
| July 2018 | $258769.18 | $1371.69 | $466.00 | $905.69 |
| August 2018 | $258303.18 | $1371.69 | $467.63 | $904.06 |
| September 2018 | $257835.55 | $1371.69 | $469.27 | $902.42 |
| October 2018 | $257366.28 | $1371.69 | $470.91 | $900.78 |
| November 2018 | $256895.37 | $1371.69 | $472.56 | $899.13 |
| December 2018 | $256422.81 | $1371.69 | $474.21 | $897.48 |
| January 2019 | $255948.60 | $1371.69 | $475.87 | $895.82 |
| February 2019 | $255472.73 | $1371.69 | $477.54 | $894.15 |
| March 2019 | $254995.19 | $1371.69 | $479.21 | $892.48 |
| April 2019 | $254515.98 | $1371.69 | $480.88 | $890.81 |
| May 2019 | $254035.10 | $1371.69 | $482.57 | $889.12 |
| June 2019 | $253552.53 | $1371.69 | $484.26 | $887.43 |
| July 2019 | $253068.27 | $1371.69 | $485.95 | $885.74 |
| August 2019 | $252582.32 | $1371.69 | $487.65 | $884.04 |
| September 2019 | $252094.67 | $1371.69 | $489.36 | $882.33 |
| October 2019 | $251605.31 | $1371.69 | $491.07 | $880.62 |
| November 2019 | $251114.24 | $1371.69 | $492.79 | $878.90 |
| December 2019 | $250621.45 | $1371.69 | $494.51 | $877.18 |
| January 2020 | $250126.94 | $1371.69 | $496.25 | $875.44 |
| February 2020 | $249630.69 | $1371.69 | $497.98 | $873.71 |
| March 2020 | $249132.71 | $1371.69 | $499.73 | $871.96 |
| April 2020 | $248632.98 | $1371.69 | $501.47 | $870.22 |
| May 2020 | $248131.51 | $1371.69 | $503.23 | $868.46 |
| June 2020 | $247628.28 | $1371.69 | $504.99 | $866.70 |
| July 2020 | $247123.29 | $1371.69 | $506.76 | $864.93 |
| August 2020 | $246616.53 | $1371.69 | $508.53 | $863.16 |
| September 2020 | $246108.00 | $1371.69 | $510.31 | $861.38 |
| October 2020 | $245597.69 | $1371.69 | $512.10 | $859.59 |
| November 2020 | $245085.59 | $1371.69 | $513.89 | $857.80 |
| December 2020 | $244571.70 | $1371.69 | $515.69 | $856.00 |
| January 2021 | $244056.01 | $1371.69 | $517.49 | $854.20 |
| February 2021 | $243538.52 | $1371.69 | $519.31 | $852.38 |
| March 2021 | $243019.21 | $1371.69 | $521.12 | $850.57 |
| April 2021 | $242498.09 | $1371.69 | $522.95 | $848.74 |
| May 2021 | $241975.14 | $1371.69 | $524.78 | $846.91 |
| June 2021 | $241450.36 | $1371.69 | $526.61 | $845.08 |
| July 2021 | $240923.75 | $1371.69 | $528.46 | $843.23 |
| August 2021 | $240395.29 | $1371.69 | $530.31 | $841.38 |
| September 2021 | $239864.98 | $1371.69 | $532.16 | $839.53 |
| October 2021 | $239332.82 | $1371.69 | $534.03 | $837.66 |
| November 2021 | $238798.79 | $1371.69 | $535.89 | $835.80 |
| December 2021 | $238262.90 | $1371.69 | $537.77 | $833.92 |
| January 2022 | $237725.13 | $1371.69 | $539.65 | $832.04 |
| February 2022 | $237185.48 | $1371.69 | $541.54 | $830.15 |
| March 2022 | $236643.94 | $1371.69 | $543.44 | $828.25 |
| April 2022 | $236100.50 | $1371.69 | $545.34 | $826.35 |
| May 2022 | $235555.16 | $1371.69 | $547.25 | $824.44 |
| June 2022 | $235007.91 | $1371.69 | $549.16 | $822.53 |
| July 2022 | $234458.75 | $1371.69 | $551.08 | $820.61 |
| August 2022 | $233907.67 | $1371.69 | $553.01 | $818.68 |
| September 2022 | $233354.66 | $1371.69 | $554.95 | $816.74 |
| October 2022 | $232799.71 | $1371.69 | $556.89 | $814.80 |
| November 2022 | $232242.82 | $1371.69 | $558.84 | $812.85 |
| December 2022 | $231683.98 | $1371.69 | $560.80 | $810.89 |
| January 2023 | $231123.18 | $1371.69 | $562.76 | $808.93 |
| February 2023 | $230560.42 | $1371.69 | $564.73 | $806.96 |
| March 2023 | $229995.69 | $1371.69 | $566.71 | $804.98 |
| April 2023 | $229428.98 | $1371.69 | $568.69 | $803.00 |
| May 2023 | $228860.29 | $1371.69 | $570.68 | $801.01 |
| June 2023 | $228289.61 | $1371.69 | $572.68 | $799.01 |
| July 2023 | $227716.93 | $1371.69 | $574.68 | $797.01 |
| August 2023 | $227142.25 | $1371.69 | $576.69 | $795.00 |
| September 2023 | $226565.56 | $1371.69 | $578.71 | $792.98 |
| October 2023 | $225986.85 | $1371.69 | $580.74 | $790.95 |
| November 2023 | $225406.11 | $1371.69 | $582.77 | $788.92 |
| December 2023 | $224823.34 | $1371.69 | $584.81 | $786.88 |
| January 2024 | $224238.53 | $1371.69 | $586.86 | $784.83 |
| February 2024 | $223651.67 | $1371.69 | $588.91 | $782.78 |
| March 2024 | $223062.76 | $1371.69 | $590.97 | $780.72 |
| April 2024 | $222471.79 | $1371.69 | $593.04 | $778.65 |
| May 2024 | $221878.75 | $1371.69 | $595.11 | $776.58 |
| June 2024 | $221283.64 | $1371.69 | $597.20 | $774.49 |
| July 2024 | $220686.44 | $1371.69 | $599.29 | $772.40 |
| August 2024 | $220087.15 | $1371.69 | $601.38 | $770.31 |
| September 2024 | $219485.77 | $1371.69 | $603.49 | $768.20 |
| October 2024 | $218882.28 | $1371.69 | $605.60 | $766.09 |
| November 2024 | $218276.68 | $1371.69 | $607.72 | $763.97 |
| December 2024 | $217668.96 | $1371.69 | $609.85 | $761.84 |
| January 2025 | $217059.11 | $1371.69 | $611.98 | $759.71 |
| February 2025 | $216447.13 | $1371.69 | $614.13 | $757.56 |
| March 2025 | $215833.00 | $1371.69 | $616.27 | $755.42 |
| April 2025 | $215216.73 | $1371.69 | $618.43 | $753.26 |
| May 2025 | $214598.30 | $1371.69 | $620.60 | $751.09 |
| June 2025 | $213977.70 | $1371.69 | $622.77 | $748.92 |
| July 2025 | $213354.93 | $1371.69 | $624.95 | $746.74 |
| August 2025 | $212729.98 | $1371.69 | $627.14 | $744.55 |
| September 2025 | $212102.84 | $1371.69 | $629.33 | $742.36 |
| October 2025 | $211473.51 | $1371.69 | $631.53 | $740.16 |
| November 2025 | $210841.98 | $1371.69 | $633.74 | $737.95 |
| December 2025 | $210208.24 | $1371.69 | $635.96 | $735.73 |
| January 2026 | $209572.28 | $1371.69 | $638.19 | $733.50 |
| February 2026 | $208934.09 | $1371.69 | $640.42 | $731.27 |
| March 2026 | $208293.67 | $1371.69 | $642.66 | $729.03 |
| April 2026 | $207651.01 | $1371.69 | $644.91 | $726.78 |
| May 2026 | $207006.10 | $1371.69 | $647.17 | $724.52 |
| June 2026 | $206358.93 | $1371.69 | $649.43 | $722.26 |
| July 2026 | $205709.50 | $1371.69 | $651.71 | $719.98 |
| August 2026 | $205057.79 | $1371.69 | $653.99 | $717.70 |
| September 2026 | $204403.80 | $1371.69 | $656.28 | $715.41 |
| October 2026 | $203747.52 | $1371.69 | $658.57 | $713.12 |
| November 2026 | $203088.95 | $1371.69 | $660.88 | $710.81 |
| December 2026 | $202428.07 | $1371.69 | $663.19 | $708.50 |
| January 2027 | $201764.88 | $1371.69 | $665.51 | $706.18 |
| February 2027 | $201099.37 | $1371.69 | $667.84 | $703.85 |
| March 2027 | $200431.53 | $1371.69 | $670.18 | $701.51 |
| April 2027 | $199761.35 | $1371.69 | $672.53 | $699.16 |
| May 2027 | $199088.82 | $1371.69 | $674.88 | $696.81 |
| June 2027 | $198413.94 | $1371.69 | $677.24 | $694.45 |
| July 2027 | $197736.70 | $1371.69 | $679.61 | $692.08 |
| August 2027 | $197057.09 | $1371.69 | $681.99 | $689.70 |
| September 2027 | $196375.10 | $1371.69 | $684.38 | $687.31 |
| October 2027 | $195690.72 | $1371.69 | $686.77 | $684.92 |
| November 2027 | $195003.95 | $1371.69 | $689.18 | $682.51 |
| December 2027 | $194314.77 | $1371.69 | $691.59 | $680.10 |
| January 2028 | $193623.18 | $1371.69 | $694.01 | $677.68 |
| February 2028 | $192929.17 | $1371.69 | $696.44 | $675.25 |
| March 2028 | $192232.73 | $1371.69 | $698.88 | $672.81 |
| April 2028 | $191533.85 | $1371.69 | $701.32 | $670.37 |
| May 2028 | $190832.53 | $1371.69 | $703.78 | $667.91 |
| June 2028 | $190128.75 | $1371.69 | $706.24 | $665.45 |
| July 2028 | $189422.51 | $1371.69 | $708.71 | $662.98 |
| August 2028 | $188713.80 | $1371.69 | $711.19 | $660.50 |
| September 2028 | $188002.61 | $1371.69 | $713.68 | $658.01 |
| October 2028 | $187288.93 | $1371.69 | $716.18 | $655.51 |
| November 2028 | $186572.75 | $1371.69 | $718.69 | $653.00 |
| December 2028 | $185854.06 | $1371.69 | $721.20 | $650.49 |
| January 2029 | $185132.86 | $1371.69 | $723.72 | $647.97 |
| February 2029 | $184409.14 | $1371.69 | $726.26 | $645.43 |
| March 2029 | $183682.88 | $1371.69 | $728.80 | $642.89 |
| April 2029 | $182954.08 | $1371.69 | $731.35 | $640.34 |
| May 2029 | $182222.73 | $1371.69 | $733.91 | $637.78 |
| June 2029 | $181488.82 | $1371.69 | $736.48 | $635.21 |
| July 2029 | $180752.34 | $1371.69 | $739.06 | $632.63 |
| August 2029 | $180013.28 | $1371.69 | $741.64 | $630.05 |
| September 2029 | $179271.64 | $1371.69 | $744.24 | $627.45 |
| October 2029 | $178527.40 | $1371.69 | $746.84 | $624.85 |
| November 2029 | $177780.56 | $1371.69 | $749.46 | $622.23 |
| December 2029 | $177031.10 | $1371.69 | $752.08 | $619.61 |
| January 2030 | $176279.02 | $1371.69 | $754.71 | $616.98 |
| February 2030 | $175524.31 | $1371.69 | $757.35 | $614.34 |
| March 2030 | $174766.96 | $1371.69 | $760.01 | $611.68 |
| April 2030 | $174006.95 | $1371.69 | $762.67 | $609.02 |
| May 2030 | $173244.28 | $1371.69 | $765.34 | $606.35 |
| June 2030 | $172478.94 | $1371.69 | $768.01 | $603.68 |
| July 2030 | $171710.93 | $1371.69 | $770.70 | $600.99 |
| August 2030 | $170940.23 | $1371.69 | $773.40 | $598.29 |
| September 2030 | $170166.83 | $1371.69 | $776.11 | $595.58 |
| October 2030 | $169390.72 | $1371.69 | $778.82 | $592.87 |
| November 2030 | $168611.90 | $1371.69 | $781.55 | $590.14 |
| December 2030 | $167830.35 | $1371.69 | $784.28 | $587.41 |
| January 2031 | $167046.07 | $1371.69 | $787.03 | $584.66 |
| February 2031 | $166259.04 | $1371.69 | $789.78 | $581.91 |
| March 2031 | $165469.26 | $1371.69 | $792.55 | $579.14 |
| April 2031 | $164676.71 | $1371.69 | $795.32 | $576.37 |
| May 2031 | $163881.39 | $1371.69 | $798.11 | $573.58 |
| June 2031 | $163083.28 | $1371.69 | $800.90 | $570.79 |
| July 2031 | $162282.38 | $1371.69 | $803.70 | $567.99 |
| August 2031 | $161478.68 | $1371.69 | $806.51 | $565.18 |
| September 2031 | $160672.17 | $1371.69 | $809.34 | $562.35 |
| October 2031 | $159862.83 | $1371.69 | $812.17 | $559.52 |
| November 2031 | $159050.66 | $1371.69 | $815.01 | $556.68 |
| December 2031 | $158235.65 | $1371.69 | $817.87 | $553.82 |
| January 2032 | $157417.78 | $1371.69 | $820.73 | $550.96 |
| February 2032 | $156597.05 | $1371.69 | $823.60 | $548.09 |
| March 2032 | $155773.45 | $1371.69 | $826.48 | $545.21 |
| April 2032 | $154946.97 | $1371.69 | $829.38 | $542.31 |
| May 2032 | $154117.59 | $1371.69 | $832.28 | $539.41 |
| June 2032 | $153285.31 | $1371.69 | $835.19 | $536.50 |
| July 2032 | $152450.12 | $1371.69 | $838.11 | $533.58 |
| August 2032 | $151612.01 | $1371.69 | $841.05 | $530.64 |
| September 2032 | $150770.96 | $1371.69 | $843.99 | $527.70 |
| October 2032 | $149926.97 | $1371.69 | $846.95 | $524.74 |
| November 2032 | $149080.02 | $1371.69 | $849.91 | $521.78 |
| December 2032 | $148230.11 | $1371.69 | $852.88 | $518.81 |
| January 2033 | $147377.23 | $1371.69 | $855.87 | $515.82 |
| February 2033 | $146521.36 | $1371.69 | $858.87 | $512.82 |
| March 2033 | $145662.49 | $1371.69 | $861.87 | $509.82 |
| April 2033 | $144800.62 | $1371.69 | $864.89 | $506.80 |
| May 2033 | $143935.73 | $1371.69 | $867.91 | $503.78 |
| June 2033 | $143067.82 | $1371.69 | $870.95 | $500.74 |
| July 2033 | $142196.87 | $1371.69 | $874.00 | $497.69 |
| August 2033 | $141322.87 | $1371.69 | $877.06 | $494.63 |
| September 2033 | $140445.81 | $1371.69 | $880.13 | $491.56 |
| October 2033 | $139565.68 | $1371.69 | $883.21 | $488.48 |
| November 2033 | $138682.47 | $1371.69 | $886.30 | $485.39 |
| December 2033 | $137796.17 | $1371.69 | $889.40 | $482.29 |
| January 2034 | $136906.77 | $1371.69 | $892.52 | $479.17 |
| February 2034 | $136014.25 | $1371.69 | $895.64 | $476.05 |
| March 2034 | $135118.61 | $1371.69 | $898.77 | $472.92 |
| April 2034 | $134219.84 | $1371.69 | $901.92 | $469.77 |
| May 2034 | $133317.92 | $1371.69 | $905.08 | $466.61 |
| June 2034 | $132412.84 | $1371.69 | $908.25 | $463.44 |
| July 2034 | $131504.59 | $1371.69 | $911.42 | $460.27 |
| August 2034 | $130593.17 | $1371.69 | $914.61 | $457.08 |
| September 2034 | $129678.56 | $1371.69 | $917.82 | $453.87 |
| October 2034 | $128760.74 | $1371.69 | $921.03 | $450.66 |
| November 2034 | $127839.71 | $1371.69 | $924.25 | $447.44 |
| December 2034 | $126915.46 | $1371.69 | $927.49 | $444.20 |
| January 2035 | $125987.97 | $1371.69 | $930.73 | $440.96 |
| February 2035 | $125057.24 | $1371.69 | $933.99 | $437.70 |
| March 2035 | $124123.25 | $1371.69 | $937.26 | $434.43 |
| April 2035 | $123185.99 | $1371.69 | $940.54 | $431.15 |
| May 2035 | $122245.45 | $1371.69 | $943.83 | $427.86 |
| June 2035 | $121301.62 | $1371.69 | $947.13 | $424.56 |
| July 2035 | $120354.49 | $1371.69 | $950.45 | $421.24 |
| August 2035 | $119404.04 | $1371.69 | $953.78 | $417.91 |
| September 2035 | $118450.26 | $1371.69 | $957.11 | $414.58 |
| October 2035 | $117493.15 | $1371.69 | $960.46 | $411.23 |
| November 2035 | $116532.69 | $1371.69 | $963.83 | $407.86 |
| December 2035 | $115568.86 | $1371.69 | $967.20 | $404.49 |
| January 2036 | $114601.66 | $1371.69 | $970.58 | $401.11 |
| February 2036 | $113631.08 | $1371.69 | $973.98 | $397.71 |
| March 2036 | $112657.10 | $1371.69 | $977.39 | $394.30 |
| April 2036 | $111679.71 | $1371.69 | $980.81 | $390.88 |
| May 2036 | $110698.90 | $1371.69 | $984.24 | $387.45 |
| June 2036 | $109714.66 | $1371.69 | $987.69 | $384.00 |
| July 2036 | $108726.97 | $1371.69 | $991.15 | $380.54 |
| August 2036 | $107735.82 | $1371.69 | $994.61 | $377.08 |
| September 2036 | $106741.21 | $1371.69 | $998.10 | $373.59 |
| October 2036 | $105743.11 | $1371.69 | $1001.59 | $370.10 |
| November 2036 | $104741.52 | $1371.69 | $1005.09 | $366.60 |
| December 2036 | $103736.43 | $1371.69 | $1008.61 | $363.08 |
| January 2037 | $102727.82 | $1371.69 | $1012.14 | $359.55 |
| February 2037 | $101715.68 | $1371.69 | $1015.69 | $356.00 |
| March 2037 | $100699.99 | $1371.69 | $1019.24 | $352.45 |
| April 2037 | $99680.75 | $1371.69 | $1022.81 | $348.88 |
| May 2037 | $98657.94 | $1371.69 | $1026.39 | $345.30 |
| June 2037 | $97631.55 | $1371.69 | $1029.98 | $341.71 |
| July 2037 | $96601.57 | $1371.69 | $1033.58 | $338.11 |
| August 2037 | $95567.99 | $1371.69 | $1037.20 | $334.49 |
| September 2037 | $94530.79 | $1371.69 | $1040.83 | $330.86 |
| October 2037 | $93489.96 | $1371.69 | $1044.48 | $327.21 |
| November 2037 | $92445.48 | $1371.69 | $1048.13 | $323.56 |
| December 2037 | $91397.35 | $1371.69 | $1051.80 | $319.89 |
| January 2038 | $90345.55 | $1371.69 | $1055.48 | $316.21 |
| February 2038 | $89290.07 | $1371.69 | $1059.17 | $312.52 |
| March 2038 | $88230.90 | $1371.69 | $1062.88 | $308.81 |
| April 2038 | $87168.02 | $1371.69 | $1066.60 | $305.09 |
| May 2038 | $86101.42 | $1371.69 | $1070.34 | $301.35 |
| June 2038 | $85031.08 | $1371.69 | $1074.08 | $297.61 |
| July 2038 | $83957.00 | $1371.69 | $1077.84 | $293.85 |
| August 2038 | $82879.16 | $1371.69 | $1081.61 | $290.08 |
| September 2038 | $81797.55 | $1371.69 | $1085.40 | $286.29 |
| October 2038 | $80712.15 | $1371.69 | $1089.20 | $282.49 |
| November 2038 | $79622.95 | $1371.69 | $1093.01 | $278.68 |
| December 2038 | $78529.94 | $1371.69 | $1096.84 | $274.85 |
| January 2039 | $77433.10 | $1371.69 | $1100.67 | $271.02 |
| February 2039 | $76332.43 | $1371.69 | $1104.53 | $267.16 |
| March 2039 | $75227.90 | $1371.69 | $1108.39 | $263.30 |
| April 2039 | $74119.51 | $1371.69 | $1112.27 | $259.42 |
| May 2039 | $73007.24 | $1371.69 | $1116.16 | $255.53 |
| June 2039 | $71891.08 | $1371.69 | $1120.07 | $251.62 |
| July 2039 | $70771.01 | $1371.69 | $1123.99 | $247.70 |
| August 2039 | $69647.02 | $1371.69 | $1127.93 | $243.76 |
| September 2039 | $68519.09 | $1371.69 | $1131.87 | $239.82 |
| October 2039 | $67387.22 | $1371.69 | $1135.83 | $235.86 |
| November 2039 | $66251.39 | $1371.69 | $1139.81 | $231.88 |
| December 2039 | $65111.58 | $1371.69 | $1143.80 | $227.89 |
| January 2040 | $63967.78 | $1371.69 | $1147.80 | $223.89 |
| February 2040 | $62819.98 | $1371.69 | $1151.82 | $219.87 |
| March 2040 | $61668.16 | $1371.69 | $1155.85 | $215.84 |
| April 2040 | $60512.31 | $1371.69 | $1159.90 | $211.79 |
| May 2040 | $59352.41 | $1371.69 | $1163.96 | $207.73 |
| June 2040 | $58188.45 | $1371.69 | $1168.03 | $203.66 |
| July 2040 | $57020.42 | $1371.69 | $1172.12 | $199.57 |
| August 2040 | $55848.30 | $1371.69 | $1176.22 | $195.47 |
| September 2040 | $54672.08 | $1371.69 | $1180.34 | $191.35 |
| October 2040 | $53491.74 | $1371.69 | $1184.47 | $187.22 |
| November 2040 | $52307.27 | $1371.69 | $1188.61 | $183.08 |
| December 2040 | $51118.66 | $1371.69 | $1192.77 | $178.92 |
| January 2041 | $49925.89 | $1371.69 | $1196.95 | $174.74 |
| February 2041 | $48728.94 | $1371.69 | $1201.14 | $170.55 |
| March 2041 | $47527.80 | $1371.69 | $1205.34 | $166.35 |
| April 2041 | $46322.46 | $1371.69 | $1209.56 | $162.13 |
| May 2041 | $45112.90 | $1371.69 | $1213.79 | $157.90 |
| June 2041 | $43899.11 | $1371.69 | $1218.04 | $153.65 |
| July 2041 | $42681.07 | $1371.69 | $1222.31 | $149.38 |
| August 2041 | $41458.76 | $1371.69 | $1226.58 | $145.11 |
| September 2041 | $40232.18 | $1371.69 | $1230.88 | $140.81 |
| October 2041 | $39001.30 | $1371.69 | $1235.19 | $136.50 |
| November 2041 | $37766.11 | $1371.69 | $1239.51 | $132.18 |
| December 2041 | $36526.60 | $1371.69 | $1243.85 | $127.84 |
| January 2042 | $35282.75 | $1371.69 | $1248.20 | $123.49 |
| February 2042 | $34034.55 | $1371.69 | $1252.57 | $119.12 |
| March 2042 | $32781.98 | $1371.69 | $1256.95 | $114.74 |
| April 2042 | $31525.03 | $1371.69 | $1261.35 | $110.34 |
| May 2042 | $30263.68 | $1371.69 | $1265.77 | $105.92 |
| June 2042 | $28997.91 | $1371.69 | $1270.20 | $101.49 |
| July 2042 | $27727.71 | $1371.69 | $1274.64 | $97.05 |
| August 2042 | $26453.07 | $1371.69 | $1279.10 | $92.59 |
| September 2042 | $25173.97 | $1371.69 | $1283.58 | $88.11 |
| October 2042 | $23890.39 | $1371.69 | $1288.07 | $83.62 |
| November 2042 | $22602.32 | $1371.69 | $1292.58 | $79.11 |
| December 2042 | $21309.74 | $1371.69 | $1297.11 | $74.58 |
| January 2043 | $20012.63 | $1371.69 | $1301.65 | $70.04 |
| February 2043 | $18710.98 | $1371.69 | $1306.20 | $65.49 |
| March 2043 | $17404.78 | $1371.69 | $1310.77 | $60.92 |
| April 2043 | $16094.01 | $1371.69 | $1315.36 | $56.33 |
| May 2043 | $14778.65 | $1371.69 | $1319.96 | $51.73 |
| June 2043 | $13458.69 | $1371.69 | $1324.58 | $47.11 |
| July 2043 | $12134.11 | $1371.69 | $1329.22 | $42.47 |
| August 2043 | $10804.89 | $1371.69 | $1333.87 | $37.82 |
| September 2043 | $9471.02 | $1371.69 | $1338.54 | $33.15 |
| October 2043 | $8132.48 | $1371.69 | $1343.23 | $28.46 |
| November 2043 | $6789.25 | $1371.69 | $1347.93 | $23.76 |
| December 2043 | $5441.32 | $1371.69 | $1352.65 | $19.04 |
| January 2044 | $4088.67 | $1371.69 | $1357.38 | $14.31 |
| February 2044 | $2731.29 | $1371.69 | $1362.13 | $9.56 |
| March 2044 | $1369.16 | $1371.69 | $1366.90 | $4.79 |
| Total | $493808.40 | $280497.74 | $213310.66 | |
| Month | Balance | Payment | Principal | Interest |
Let’s refinance to a 30-year loan with an interest rate of 3.0% (APR 3.101%) with closing costs of 3% ($ 7,274.95), and finance the closing costs. It has been 84 months since we closed on our initial loan in April 2014, and we have $242,498.09 left on our balance.
We are financing our closing costs, bringing our total loan amount to
$7,274.95 + $242,498.09 = $249,773.04
The new monthly mortgage payment would drop to approximately $1053.05, saving $319 per month.
See also: Run your own scenario with our Amortization calculator
Calculate your break-even point
The “break-even point” is how long it could take for your refinance to pay for itself through savings due to the lower interest rate. To calculate a break-even point, divide the mortgage closing costs by the amount saved each month with the new interest rate.
Closing Costs / Monthly Savings = x-months*
* Where x-months is the number of monthly payments before reaching the break-even point.
Break-Even Calculation Example,
If we save $200 per month by refinancing and pay $5,000 in closing costs, it will take 25 months to break even on the new loan.
$5,000(closing costs) / $200 (monthly savings) = 25 (months to break even)
If you don’t plan on keeping your home beyond the new loan’s break-even point, it may not make sense to refinance in the long run, unless a lower monthly payment is more important to you.
Applying the formula to our hypothetical scenario:
Remembering our refinance example above, we can calculate the break-even point for our hypothetical refinance:
7,274.95 / 319 = 23 months
We would break even on our refinance and actually begin saving money after 23 months ((or just under two years) of regular mortgage payments on the new loan.
If we then sold the hypothetical home 10 years after our hypothetical refinance, we will have saved a total of $30,943!
This is just an example to help you understand the math behind refinancing. Rates are variable, and highly dependent on myriad factors. Nevertheless, if you have an interest rate that’s higher than what you could get now, for whatever reason, you should be able to now calculate for yourself if a refinance makes financial sense for your situation.
Mind your credit score.
Paying your bills on time can improve your credit score. A higher credit score opens up the opportunity to qualify for more credit, and at lower interest rates.
A lower interest rate can reduce monthly debt payments, which could result in saving hundreds of dollars over the course of a single year. With mortgage rates near lows that haven’t been seen for a while, there’s a good chance that you can refinance with a lower rate than what you currently have.
If you currently rent, the same idea applies for a purchase. You can get more house for your money with a relatively low interest rate.
Factor fees into the equation.
It is important to recognize that refinancing a mortgage can cost you. Here are some typical fees you may have to pay during a refinance.
- Mortgage application fee (~$250 – $500)
- Origination fee (~1% of the value of the loan)
- Appraisal fee (~$300 – $600)
Make sure you know which costs to expect, and whether you can afford them. A good loan officer will help calculate affordability to improve your financial outlook, or help you determine whether refinancing makes financial sense for you.
Consider the terms of your new loan
Before you decide to refinance, calculate your break-even point, as well as how the overall costs, including total interest, of your current mortgage compares to a new loan.
It is also worth mentioning that refinancing earlier into the life of your mortgage usually makes more financial sense, due to the nature of amortization. So, what exactly can you do with your newfound savings from refinancing to a lower rate?
How To Use Your Savings
With the savings from a lower interest rate, you could:
- Open a new high yield savings account.
- Create or bolster your emergency savings buffer.
- Pay down your expensive consumer debt.
- Open an investment account, like an IRA (or ROTH), or a taxable investment account.
- Save for a vacation, a new car, or any savings goal you want to reach.
If you are ready to see if refinancing is right for you, give us a call or contact us today for more information, and a fair look to see if and how much you could save!
Contact your local Benchmark branch. Contact us today for personalized information. Call me yourself or request a call from me. WeI would be honored to provide you with our famous excellent service for your new loan.
Benchmark brings you home.
One comment
Comments are closed.