1. What is the Rocket Mortgage Refinance Calculator?

The Rocket Mortgage Refinance Calculator helps homeowners estimate their new monthly payment when refinancing their mortgage. It uses the standard mortgage payment formula to calculate payments based on current loan balance, new interest rate, and remaining term.

2. How Does the Calculator Work?

The calculator uses the mortgage payment formula:

Where:

• \( \text{Balance} \) — Current loan balance (USD)
• \( \text{new r} \) — New monthly interest rate (decimal)
• \( n \) — Remaining term in months

Explanation: The equation calculates the fixed monthly payment required to fully amortize a loan over its remaining term at the new interest rate.

3. Importance of Refinance Calculation

Details: Accurate refinance calculations help homeowners determine if refinancing will lower their payments, shorten their loan term, or provide other financial benefits.

4. Using the Calculator

Tips: Enter current loan balance in USD, new annual interest rate as a percentage, and remaining term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Should I include escrow in my balance?
A: No, only include the principal balance of your loan. Escrow amounts for taxes and insurance aren't part of this calculation.

Q2: How accurate is this calculator?
A: It provides a good estimate, but actual refinance offers may include additional fees or different terms.

Q3: What's a good refinance rate?
A: Good rates depend on current market conditions, your credit score, and loan terms. Compare with current averages.

Q4: Does this account for closing costs?
A: No, this calculates payment only. Closing costs would typically be rolled into the new loan balance.

Q5: Can I use this for other types of loans?
A: Yes, this formula works for any fixed-rate amortizing loan, though terms may differ.