The best way to use a refinance mortgage calculator is to first work out exactly what you’re looking for in your next home loan, then apply the relevant calculations.
Some examples of what you might be looking for in a new home loan include:
- Reducing your repayments. A refinance calculator can help you switch and save, by working out the lowest interest rates you may be able to afford, and how much you may save compared to your current mortgage rate.
- Paying off your loan faster. Whether you’re five or fifteen years into paying off your home loan, refinancing to a lower interest rate may allow you to shorten your loan term. If you keep making the same home loan repayments as you are now, but switch to a lower rate, you may be able to pay off the loan much sooner.
- Choosing a different loan type. Maybe you are on a variable rate home loan and now want the stability of locking in a fixed rate home loan, so your repayments are no longer subject to market conditions, or vice versa?
- Getting cash out of your home loan. Perhaps you’re looking to consolidate some debt or renovate your home? Refinancing your home loan can let you enjoy flexible features, such as a redraw facility, or you could refinance and borrow a little more to have some extra cash at your disposal.
Once you know what you want from your new home loan, you can select the correct option from above the calculator.
Next, all you’ll need to do is:
- Enter your loan balance
- Enter your current monthly repayments
- Enter your current interest rate
Then, depending on what refinancing journey you are on, you’ll need to:
- Enter the amount of cash out you want; or
- Enter a number of years to see how much you may save with different homeloans over time by switching.
Your calculations, and potential new home loans will then automatically load in the comparison table.
- Keep in mind that a refinance home loan calculator does not take every aspect of your personal situation into account, such as your credit score or employment status, and is not a substitute for professional financial advice. Consider contacting your mortgage broker for advice specific to your personal circumstances.