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Calculating Hidden Cost of Reamortization on a Refi
Posted on 12/17/20 at 10:31 am
Posted on 12/17/20 at 10:31 am
Is there an easy way to calculate this? I see amortization calcs online but it's just a table that requires alot of manual math. Is there an easier way?
Example- Refi will save $100 a month on the payment, but reamortizing means more than $100 will be going back to interest instead of principal, at least until amortization catches back up. The difference in money there.... that's what I'm looking to calculate easily without looking like Bob Cratchet in the corner by candlelight.
Example- Refi will save $100 a month on the payment, but reamortizing means more than $100 will be going back to interest instead of principal, at least until amortization catches back up. The difference in money there.... that's what I'm looking to calculate easily without looking like Bob Cratchet in the corner by candlelight.
4
Posted on 12/17/20 at 10:38 am to deeprig9
I need more info, i.e. current term, new term, current rate, new rate, current principle, new principle, closing costs etc.
Posted on 12/17/20 at 10:42 am to deeprig9
Try this one: LINK
You put in the numbers for the loans you want to compare, and it shows you the amortization schedule for both. You can see how much interest you've already paid on the existing loan to date, and then look at the new loan's schedule. Assuming you are adding the refinancing costs to the new loan, it should show you how much you've already sunk in old loan vs. new.
I just did this exact comparison about 2 months ago, and I determined that the reduction in interest rates wasn't sufficient, based on refinancing costs and what I'd already paid in interest on existing loan....I was better served putting the refinancing costs into the existing loan and adding more to the loan each month.
There are calculators with variable payment schedules that will show an amort schedule with regular or variable additional payments, so you can see exactly what's what.
You put in the numbers for the loans you want to compare, and it shows you the amortization schedule for both. You can see how much interest you've already paid on the existing loan to date, and then look at the new loan's schedule. Assuming you are adding the refinancing costs to the new loan, it should show you how much you've already sunk in old loan vs. new.
I just did this exact comparison about 2 months ago, and I determined that the reduction in interest rates wasn't sufficient, based on refinancing costs and what I'd already paid in interest on existing loan....I was better served putting the refinancing costs into the existing loan and adding more to the loan each month.
There are calculators with variable payment schedules that will show an amort schedule with regular or variable additional payments, so you can see exactly what's what.
Posted on 12/17/20 at 10:51 am to deeprig9
quote:
Example- Refi will save $100 a month on the payment, but reamortizing means more than $100 will be going back to interest instead of principal, at least until amortization catches back up. The difference in money there.... that's what I'm looking to calculate easily without looking like Bob Cratchet in the corner by candlelight.
Another thing that is often overlooked when going to shorter lengths (for increased payment) is what happens if you applied that same payment to the existing mortgage?
I made a spreadsheet that looks at it this way for very similar reasons. You can either feed me the info here or I can send it to you... @ gmail
Posted on 12/18/20 at 9:43 am to deeprig9
My best guess would be to look at the principal and interest part of the payments on both loans. Multiply the current loan's P&I by how many months left on the existing loan. Then do the same for the P&I on the length of the refinance loan.
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