1. What is Refinance Cost Calculation?

The refinance cost calculation helps determine the total cost of a refinanced mortgage, including all monthly payments and upfront fees. This helps borrowers compare different loan options and make informed financial decisions.

2. How Does the Calculator Work?

The calculator uses the refinance cost formula:

Where:

• \( EMI \) — Equated Monthly Installment (currency unit)
• \( N \) — Loan tenure in months
• \( F \) — Refinancing fees (currency unit)

Explanation: The equation calculates the sum of all monthly payments over the loan term plus any upfront refinancing fees.

3. Importance of Refinance Cost Calculation

Details: Calculating total refinance costs helps borrowers understand the true cost of a loan, compare different refinancing options, and determine if refinancing will actually save money in the long run.

4. Using the Calculator

Tips: Enter your monthly payment amount, loan term in months, and any refinancing fees. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What costs are included in refinancing fees?
A: Typically includes application fees, appraisal fees, origination fees, title search, and other closing costs.

Q2: Should I include taxes and insurance in the EMI?
A: Only include the principal and interest portion of your payment for accurate refinance cost comparison.

Q3: How does this compare to my current loan?
A: Compare this total cost to the remaining payments on your current loan to determine if refinancing makes financial sense.

Q4: What if my loan has a variable rate?
A: This calculator assumes fixed payments. For adjustable-rate mortgages, use the initial fixed-rate period for calculation.

Q5: Are there other factors to consider?
A: Yes, consider break-even point, changes in loan term, and potential prepayment penalties on your current loan.