1. What Is The Loan Refinance Calculator?

The Loan Refinance Calculator helps determine potential savings when refinancing a loan. It compares the total cost of your current loan against a new loan option, accounting for fees.

2. How Does The Calculator Work?

The calculator uses the formula:

Where:

• \( Old PMT \) — Current monthly payment amount (GBP)
• \( Remaining Months \) — Number of months left on current loan
• \( New PMT \) — Proposed new monthly payment (GBP)
• \( New Term Months \) — Duration of new loan term in months
• \( Fees \) — Any refinancing fees or charges (GBP)

Explanation: This calculation shows the net financial impact of switching loans by comparing total remaining payments minus new total payments and fees.

3. Importance Of Refinance Calculation

Details: Proper refinance analysis helps borrowers make informed financial decisions, potentially saving significant money over the loan term.

4. Using The Calculator

Tips: Enter all monetary values in GBP. Ensure remaining months and new term months are positive integers. Include all applicable refinance fees for accurate results.

5. Frequently Asked Questions (FAQ)

Q1: When does refinancing make sense?
A: Refinancing is beneficial when the new loan offers lower total costs, considering both monthly payments and fees.

Q2: What if the savings calculation shows a negative value?
A: A negative result means refinancing would cost you more money overall than keeping your current loan.

Q3: Should I consider interest rates in this calculation?
A: While interest rates affect monthly payments, this calculator uses the payment amounts directly for simplicity.

Q4: Are there other costs besides refinance fees?
A: Yes, consider early repayment charges, legal fees, and valuation costs that may apply to your situation.

Q5: How accurate is this calculator?
A: It provides a good estimate, but consult with a financial advisor for personalized advice based on your specific circumstances.