Refinancing Worksheet
Craig Acord

Part one: Does it pay to swap loans?

Use this section to see how long you need to stay put for a refi to pay off. Our example assumes the borrower has a $150,000 balance on a 30-year loan at 8.25% and pays 2.5% in points and closing costs-a total of $3,750-to switch to a 7% loan.

1.	Enter the monthly principal and interest payment on your current mortgage.	EXAMPLE $1,127
2.	Enter the monthly interest and principal payment on a new mortgage. (Get the exact figure from your lender, use the table below, or use the calculator under TOOLS at money.com.)	$998
3.	Subtract line 2 from line 1. This is your monthly saving.	$129
4.	Enter your refinancing costs (available from your lender). To estimate, add points, if any, and another 1% of the loan amount if you pay any closing costs.	$3,750
5.	Divide line 4 by line 3. This is the number of months needed to recoup your refinancing costs. If you plan to be in your home for at least a year or so beyond this point, it makes sense to refinance.	29

Part two: Which new mortgage is better?

Once you’ve used part one of the worksheet to analyze a couple of loans with different rates and up-front costs, use this part to compare your options. Our example assumes you are choosing between two mortgages: a $150,000 loan at 7% with total up-front costs of 2.5% vs. a $150,000 loan at 7.5% with costs of 1%.

1.	Enter the total refinancing costs for the mortgage with the higher out-of-pocket expenses.	$3,750
2.	Enter the total refinancing costs for the lower-cost mortgage.	$1,500
3.	Subtract line 2 from line1. This is the difference in refinancing costs.	$2,250
4.	Enter your monthly savings by switching from your current mortgage to the higher-cost loan (from line 3 in part one).	$129
5.	Enter your monthly savings by switching from your current mortgage to the lower-cost loan (from line 3 in part one).	$78
6.	Subtract line 5 from line 4. This is the difference in the monthly savings.	$51
7.	Divide line 3 by line 6. This the number of months it will take to come out ahead with the higher-cost mortgage. If you stay put at least a year beyond this point, the higher-cost loan is a better option.	41

What’s your monthly payment? To compute a payment, divide your new mortgage by 1,000 and multiply the result by the dollar amount at right for the rate and term you want.

Interest Rate 30-year fixed-rate mortgage 15-year fixed-rate mortgage 6.50% $6.32 $8.71 6.75% $6.49 $8.85 7.25% $6.82 $9.13 7.50% $6.99 $9.27 7.75% $7.16 $9.41