Second Mortgage Calculator – Refinance & Consolidation

This second mortgage calculator figures the savings from refinancing and consolidating your old 1st and 2nd mortgages into a single loan.

This calculator shows you the monthly payments, how much you will save in interest from the refinance/consolidation, and it figures how long it takes to break even on the closing costs.

Please note: Don't include the escrow portions of your monthly payment (taxes, insurance) - just include principal and interest.

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First Mortgage
Balance due on first mortgage ($):
(call mortgage lender for payoff amount)
Current monthly mortgage payment ($):
(principal and interest portion only)
First mortgage interest rate (%):
Second Mortgage (Optional)
Second mortgage balance due ($):
(call mortgage lender for payoff amount)
Second mortgage monthly payment ($):
(principal and interest portion only)
Second mortgage interest rate (%):
Refinance - Consolidation
Interest rate you will be refinancing at (%):
Refinanced loan term (# of years):
Expected closing costs :
(Input points as "2" or dollar amount is .02 times principal)
Will you finance these closing costs?
This is the new monthly payment if you refinance:
Monthly payment (decrease)/increase:
Number of months for interest savings to repay closing costs:
Total interest costs with current first and second mortgages:
Total interest costs after refinance - consolidation:
Interest savings from refinance - consolidation:
Net Refinancing Savings (interest savings less closing costs):

How Much Will You Save By Refinancing And Consolidating Your Mortgages?

Thinking about refinancing and consolidating your debt into a second mortgage?

Not sure if you’ll save money?

Don’t take a lender’s word for it – after all, they’re hoping to make money on the transaction. Do your homework and make sure a refinance and consolidation loan is right for you.

This second mortgage calculator reveals your new monthly payments, interest savings, and more so that you can decide if refinancing and consolidating makes good business sense.

Below is more information about second mortgages and debt consolidation to help you make a smart decision . . . .

Refinancing And Consolidating Mortgages

Are your monthly mortgage payments too high?

Would you rather have one mortgage payment instead of two?

If yes, then you may be a candidate for refinancing and consolidating your mortgages.

When you have a second mortgage on the same home as your first mortgage, that’s called a home equity loan or a home equity line of credit. Home equity loans add an additional layer of complication to the process of refinancing. Remember, the second mortgage lender must agree to give up their position to the refinance lender.

If they won’t agree to giving up their position to a new lender, you must either:

  • consolidate both loans with the second mortgage lender,
  • pay off the second mortgage by selling other assets to generate cash, or
  • forget about refinancing altogether.

You can also lower your payments by refinancing your first mortgage only – but it isn’t easy. You’ll need to ask the second mortgage lender to agree to the new terms. Or, you could try to refinance each of the loans separately.

Please keep in mind that most lenders require you to wait at least a year after receiving your second mortgage before refinancing it.

If your existing lenders agree to refinance then the next step is to verify that it makes financial sense using this second mortgage calculator. Below are the various factors to consider that may affect your decision . . . .

Should You Refinance?

The greatest potential benefit of refinancing is interest savings. Therefore, if both of your current mortgages already have low interest rates then the costs of refinancing might be greater than your savings.

Here are some additional considerations and tips that affect the second mortgage calculation:

  • Check how much time you have left on your first loan – If you’re less than ten years away from paying off the first loan, refinancing could actually cost you more than it saves because most of your current payments are applied toward the principal balance rather than interest. A new loan will do just the opposite by allocating most of your payment to interest thus increasing your total loan cost.
  • Check your credit rating to see if you qualify for a refinance – The better your credit rating, the lower the interest rate that you will qualify for.
  • Find lenders that offer low interest rates – Take the time to shop out your new second mortgage to find the best deal and plug the figures into this calculator. You will likely be surprised at the differences in terms and interest rates from competing vendors making it well worth your time to shop around.
  • Check if the interest savings is worth the cost and hassle of refinancing – Again, the second mortgage calculator makes the math easy by balancing the up-front costs of refinancing against expected interest savings long-term to show you if it will save or cost you money.
  • Understand the risks involved with refinancing – Read the disclosures and fine print on both your old and new mortgages to make sure no penalties or excess fees will result from refinancing and consolidating.
  • Seek advice from your financial advisor – Remember, your lender may be biased and encourage you to refinance when you shouldn’t. Find an objective financial advisor whose paycheck isn’t dependent on their advice to help you with the decision.

Final Thoughts

Some people blindly refinance their mortgage only to find themselves in never-ending debt. The problem is refinancing will usually extend the term of your loan which also negatively impacts amortization. When you refinance repeatedly you end up extending your loan term over and over again so that you never actually get out of debt.

Alternatively, smart consumers refinance armed with the knowledge that they’ll save money. They calculate their interest savings and balance this against their refinance costs and extended amortizations to make a smart business decision.

It only takes a few minutes to run the numbers for your personal situation using this second mortgage calculator so you can accurately determine if refinancing and consolidating will save you money. The more you save, the more you can put toward investments and building wealth, and that can make a huge difference in your long-term financial situation.

Second Mortgage Calculator Terms & Definitions

  • Mortgage – The legal contract securing debt with the real property that it was loaned against.
  • Mortgage Payment – A regularly scheduled payment which includes principal and interest paid by the borrower to the lender.
  • Mortgage Balance – The full amount owed at any period of time during the duration of the mortgage.
  • Loan Term – The duration of the loan, in this case, the mortgage.
  • Interest Rate – The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.
  • Interest Amount – The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.
  • Principal Amount – The original sum lent or borrowed.
  • Refinance – Financing something again, preferably with a new loan at a lower rate of interest.
  • Amortization – The paying off of debt in regular installments over a period of time.
  • Closing Costs – The expenses, over and above the price of the property, that buyers and sellers normally incur to complete a real estate transaction.
  • Credit Rating – An assessment of the credit worthiness of a borrower in general terms or with respect to a particular debt or financial obligation.
  • Consolidate – The combining of assets, liabilities and other financial items of two or more entities into one (in this case, mortgages).
  • Lender – Someone who makes funds available to another with the expectation that the funds will be repaid.

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