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Before deciding to refinance your home loan, you must understand the potential benefits and the costs. Use our Massachusetts mortgage refinance calculator to estimate your new monthly payment, total interest paid, and the break-even point — which determines when your savings will surpass the initial costs. Review this guide to better understand if refinancing makes sense for you.
Key Points
• Our Massachusetts refinance calculator helps estimate monthly payments, total interest costs, and the break-even point, all key elements to making an informed refinancing decision.
• A small reduction in your interest rate — even a quarter percentage point — can lead to significant savings over the life of the loan, making refinancing a potentially advantageous move.
• Extending the loan term can lower monthly payments, but will likely increase total interest paid.
• Refinancing costs, like origination, appraisal, and attorney fees, can range from 2% to 5% of the loan amount.
Calculator Definitions
• Remaining loan balance: The remaining loan balance is what you owe on your existing mortgage. This affects how soon you can refinance a mortgage. In general, you need to have at least 20% equity in your home.
• Current/New interest rate: Interest is the percentage of the total loan amount that the lender charges. The difference between your current and new interest rates will determine potential savings from refinancing.
• Remaining/New loan term: The remaining loan term represents the amount of time over which you are expected to repay your mortgage after completing the refinancing process. A shorter term can save you a significant amount of money in interest payments over the life of the loan, but will also lead to an increase in your monthly payments.
• Points: Points, or discount points, are optional upfront fees you pay a lender to lower your interest rate. Each point costs 1% of the total loan amount and reduces the interest rate by 0.25%.
• Other costs and fees: Other costs associated with refinancing include origination, appraisal, and attorney fees. These expenses typically range from 2% to 5% of the new loan amount.
• Monthly payment: Your monthly mortgage payment typically includes both principal and interest. A refinance mortgage calculator can help you compare your current monthly payment with the estimated payment after refinancing to potentially secure better terms. Lower monthly payments alone don’t indicate whether a mortgage refinance will save you money over the long term.
• Total interest: Total interest is the cost you pay — excluding the principal — to the lender over the duration of the loan. The home refi calculator lets you compare the total interest you will pay on your current and proposed loans, helping you estimate potential savings.
How to Use the Massachusetts Mortgage Refinance Calculator
The Massachusetts mortgage refinance calculator helps you assess the financial impact of mortgage refinancing. Here’s how to use the calculator effectively:
Step 1: Enter Your Remaining Loan Balance
Enter your remaining loan balance, which is the principal amount you owe on your current home loan.
Step 2: Add Your Current Interest Rate
Input your current interest rate. This helps estimate your total interest costs, which can be compared to potential new rates and terms. Your interest rate depends on market conditions, your credit history, and the type of mortgage loan you choose.
Step 3: Estimate Your New Interest Rate
Estimate what your new interest rate would be by comparing offers from different lenders or checking online for current mortgage rates. A lower rate can reduce your monthly payments and total interest paid.
Step 4: Select Your Remaining Loan Term
Select the number of years left on your current mortgage. This allows the calculator to estimate how much you’re likely to pay in interest without refinancing.
Step 5: Choose a New Loan Term
Choose a new loan term, anywhere from 10 to 30 years. A shorter term can save on interest, while a longer term can lower monthly payments.
Step 6: Enter Any Points You Intend to Purchase
Enter discount points you intend to purchase. Each point costs 1% of the loan amount and reduces the interest rate by 0.25%. Using the mortgage refinance calculator can help you determine whether purchasing points is beneficial to your financial situation.
Step 7: Estimate Your Other Costs and Fees
Estimate other costs and fees, such as origination, home appraisal, credit report, and attorney fees, which can range from 2% to 5% of the loan amount.
Step 8: Review Your Break-Even Point
Your break-even point is when the savings from refinancing will cover the initial costs. The calculator shows you this figure, which helps you assess whether refinancing is worth pursuing.
Benefits of Using a Mortgage Refinance Payment Calculator
Using our Massachusetts refinance calculator can help you figure out whether refinancing is possible and beneficial at this time. This tool provides insight into potential savings, allowing you to see if refinancing could free up money to put toward your other financial goals. Even a small interest rate change — such as a quarter percentage point — could result in significant savings, especially for larger home loans.
The calculator can also help you consider the purpose of your refinance, whether it’s to lower your interest rate, switch to a different type of mortgage loan (such as a fixed-rate loan), or access home equity with a cash-out refinance.
What Is the Break-Even Point in Refinancing?
You can calculate your break-even point by subtracting your estimated monthly payment after a refinance from your current mortgage payment. Now divide the total closing costs by the amount you are saving each month. This figure helps you determine whether the savings from refinancing outweighs the initial costs within a reasonable time frame.
Let’s say refinancing saves you $100 each month and the total closing costs amount to $5,000, then it would take 50 months to break even. This is the amount of time needed for you to cover those upfront costs and start seeing actual savings. If you plan to sell before reaching this break-even point, then refinancing might not be beneficial for you right now. The calculator will compute your break-even point for you.
Compare current home interest rates by state and find a mortgage rate that suits your financial goals.
Select a state to view current rates:
Typical Closing Costs for a Refinance in Massachusetts
You should have a clear understanding of all the potential costs and fees before refinancing. Refinancing a home loan in Massachusetts can cost anywhere between 2% to 5% of the new loan amount. There are a variety of fixed costs such as loan application fees (up to $500), credit report fees ($25-$75), home appraisal fees ($600-$2,000), recording fees ($25-$250), and don’t forget attorney fees ($500-$1,000+). Take into account percentage-based costs too, such as loan origination fees (0.5%-1% of the purchase price) and title search and insurance (0.5%-1% of the purchase price).
Another avenue some people consider is a no-closing-cost refinance, which allows borrowers to roll the closing costs into the mortgage in exchange for a higher interest rate. This move may allow you to keep cash on hand to use for other purposes, however it will increase the principal and total interest paid so you’d have to consider whether it’s worth doing.
Reducing your monthly mortgage payment before starting the refinancing process can help lower your mortgage refinance payment. Here are some tips:
• Assess your coverage periodically and see if you can increase your deductible, bundle your home and auto policies from the same insurer, or look into whether a home upgrade (like a better security system) might qualify you for a lower rate.
• Look into extending the term of your loan, which could reduce monthly payments (this could increase your total interest paid too, however).
• Get a loan modification from your lender. This changes the terms of a loan to make monthly payments more affordable.
• Appeal your property tax assessment to potentially reduce your tax bill.
• Consider recasting your mortgage. Your lender will re-amortize the mortgage but retain the interest rate and term. The new, smaller balance equates to lower monthly payments.
The Takeaway
A home loan refinance is a major financial decision that requires a full grasp of both the costs and the benefits. Our Massachusetts mortgage refinance calculator is designed to provide you with a clear estimate of your monthly and long-term savings. By calculating your break-even point, you can get clarity on whether refinancing is the right move for your budget.
SoFi can help you save money when you refinance your mortgage. Plus, we make sure the process is as stress-free and transparent as possible. SoFi offers competitive fixed rates on a traditional mortgage refinance or cash-out refinance.
A mortgage refinance could be a game changer for your finances.
There is no one best month, mainly because the best time to refinance can vary based on prevailing mortgage rates and your financial goals. Historically, rates tend to be lower during the fall and winter months. Monitor and track current rates and ensure you’re financially stable before applying.
Do you have to put down 20% to refinance?
You aren’t required to put down 20% to refinance. However, having at least 20% equity in your home can help you avoid private mortgage insurance (PMI).
Which bank is best for refinancing?
The best bank for refinancing depends on your specific financial needs and the rates and terms it offers. Compare offers from different lenders to find the institution that provides the most competitive interest rates, favorable repayment terms, and best customer service for your needs.
How much does it cost to refinance your mortgage in Massachusetts?
Closing costs in Massachusetts range from 2% to 5% of the new loan amount. Costs may include application fees, credit report fees, appraisal fees, and title insurance. To minimize expenses, shop around and compare rates.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
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