MORTGAGE REFINANCE CALCULATOR
Should you refinance? Find out how much money you might with a mortgage refinance.
Whether you want to lower your monthly payment or shorten your mortgage term, see how refinance rates today may help you achieve your financial goals.
Question answer section
Question
What is a mortgage refinance?
Answer
A mortgage refinance allows you to obtain a new mortgage loan replacing your current mortgage. At times when mortgage rates are lower than your current mortgage interest rate, you may want to consider a refinance so that you might pay less money in interest charges over the life of your mortgage. You can also choose to extend or shorten your current loan term with your new loan depending upon your personal goals. You may also be able to take cash out of your equity when you refinance to use for a variety of purposes including home improvement, debt consolidation, or paying for major expenses or purchases.
Question
What is a cash out refinance?
Answer
A cash out refinance is when you take a portion of your home's equity out as cash while refinancing your current mortgage. A conventional refinance loan will only be for the amount that you owe on your existing mortgage, but a cash out refinance loan will increase the amount of the loan. This allows you to both replace your existing mortgage and take a lump-sum payment in cash for the additional amount of the loan.
Question
What is the difference between annual percentage rate (APR) and interest rate?
Answer
Your interest rate is the direct charge for borrowing money.
The annual percentage rate (APR), however, reflects the entire cost of your mortgage as a yearly rate and includes the interest rate, origination charge, discount points, and other costs such as lender fees, processing costs, documentation fees, prepaid mortgage interest and upfront and monthly mortgage insurance premium. When comparing loans across different lenders, it is best to use the quoted APRs for the same type and term of loan.
Question
What are the benefits of a home equity loan or mortgage refinance from Discover Home Loans?
Answer
With Discover, you will not have to pay any application fees, origination fees, or appraisal fees. Since a home equity loan or mortgage refinance is a secured debt, the average interest rate is typically lower than what you'll pay on an average credit card or other form of unsecured debt.
Question
Why do people refinance their home mortgage loan?
Answer
Refinancing your home mortgage allows you to pay off your original mortgage with a new loan. Typically, people refinance their original mortgage loan for one or more reasons:
- Earn a better interest rate,
- Reduce monthly payments by extending the repayment term of the loan, or
- Reduce interest charges paid over the life of the loan by shortening the repayment term of the loan.
You may be able to save an estimated annually.
You may lose an estimated annually.
Current monthly mortagage payment
Current loan
Refinance monthly payment
Refinancing
Savings per month$56
Number of months to recoup closing costs10
opens modal dialog for more information about number of months to recoup closing costsWhat does this possibly mean for me?
Based on the information you provided, the amount above can give you an idea of the estimated monthly reduction in your payment you could achieve by refinancing your existing mortgage at the terms you selected. It's important to consider upfront closing costs on your new loan, and the time it will take to recoup those costs. Note that some of the reduction in payments may reflect extending the due date on your loan rather than a lower interest rate. If your refinance is at a lower rate than the previous loan, you may save money if you continue making the same or higher payments. If you lower your payments too, however, you may pay higher total interest even though your rate is lower, because the debt is extended over a longer period.
You selected an adjustable rate mortgage or ARM. The amount above can give you an idea of the estimated monthly reduction in your mortgage payment you could achieve during the initial, fixed rate portion of your loan period* by refinancing your existing mortgage at the terms you selected. It's important to consider upfront closing costs on your new loan, and the time it will take to recoup those costs. In addition, you may want to discuss with a Discover mortgage banker any potential effects of changing from extending the term of your loan(s). Note that some of the reduction in payments may reflect extending the due date on your loan rather than a lower interest rate.
Call our helpful mortgage bankers at 1-888-866-1212 to start the conversation about whether refinancing is right for you.
* For example, for a 5/1 ARM, the fixed rate period is 5 years, or 60 months. After the fixed rate period, your payment may change based on the change in the index used to calculate your interest rate.
MORTGAGE REFINANCE CALCULATOR
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Discover Home Loans Restrictions and Details
We do not lend in IA or MD. You are not guaranteed approval. Once you apply and submit your credit and property information, we will confirm your eligibility. We don’t lend on cooperatives, condotels, investment properties, log homes, manufactured homes, mobile homes, or secondary homes. We will only originate one 1st lien mortgage per property per 12-month period. The maximum loan amount you qualify for will depend on additional factors, including type of loan, lien position, loan-to-value and your credit history. We may change rates, program terms, and conditions without notice. Discover Card accounts may not be paid off with this home loan. All loan programs are offered by Discover Bank, 2500 Lake Cook Road, Riverwoods, IL 60015. NMLS ID 684042
Loan Payment Example Disclosure
For example, if you borrowed $60,000 for a 20 year term at 8.86% APR, your fixed monthly payments would be $534.45.
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