Guide To Refinancing By The Numbers

As a guide, here are a few examples of different mortgage amounts, different rates and what the cost differences are. Give us a call to get the current rates and numbers for your particular situation!

For simplicity, our illustration assumes a 20% down payment to eliminate private mortgage insurance (PMI), and the payment shown is principal and interest (PI) only on a 30-year fixed-rate $200,000 mortgage. Also be aware that lowering your mortgage interest rate will also lower you mortgage interest tax deduction, so your true savings would be somewhat less than in our examples, depending on your tax bracket.

For example, with a 6.5% interest rate, the monthly PI mortgage payment is $1,264. If you are able to lower the interest rate 1% to 5.5%, the monthly mortgage amount is $1,136 -- a yearly savings of $1,543. If you are able to lower the interest rate a full 2% to 4.5%, the monthly mortgage payment drops to $1,013 and the annual savings is $3,010.

Savings can be significant even by lowering your interest rate by just 1%, as shown in the chart.

Interest Rate 4.50% 5.00% 5.50% 6.00% 6.50%
Mortgage Amount $200,000 $200,000 $200,000 $200,000 $200,000
Monthly Payment $1,013 $1,074 $1,136 $1,199 $1,264
Yearly Mortgage Paid $12,160 $12,884 $13,627 $14,389 $15,170
Savings Over .5% Higher Rate $724 $743 $762 $781
Savings Over 1% Higher Rate $1,467 $1,506 $1,543
Savings Over 1.5% Higher Rate $2,229 $2,286
Savings Over 2% Higher Rate $3,010