Reviewed by: David Chen, CFA – Financial Modeling Specialist
Use the Wells Fargo Refinancing Mortgage Calculator to determine if refinancing your current home loan is financially beneficial. Compare your potential new monthly payment and total interest costs.
Wells Fargo Refinancing Mortgage Calculator
Your Estimated New Monthly Payment
Total Interest Paid Over Term:
New Loan Principal (including costs):
Wells Fargo Refinancing Mortgage Calculator Formula
The core calculation for refinancing is based on the standard monthly payment formula, applied to the new principal (loan balance + closing costs) and new rate/term.
r = New Monthly Interest Rate (Annual Rate / 12 / 100)
n = Total Number of Payments (Term in Years * 12)
New Monthly Payment (M) = P [ r(1 + r)ⁿ / ( (1 + r)ⁿ – 1 ) ]
Formula Source: Bankrate.com – Mortgage Payment Calculation
Variables Explained
- Current Loan Balance: The remaining principal amount you owe on your existing mortgage before refinancing.
- Refinancing Closing Costs: The total fees associated with the new loan, including appraisal, legal, and origination fees. This is added to the new principal.
- New Annual Interest Rate (%): The proposed interest rate for your new Wells Fargo mortgage loan.
- New Loan Term (Years): The length of time (in years) over which you will repay the new loan (e.g., 15 or 30 years).
Related Calculators
What is Wells Fargo Refinancing?
Refinancing is the process of paying off an existing loan with the proceeds from a new loan. Homeowners often refinance to secure a lower interest rate, reduce their monthly payment, change the loan term (e.g., from 30 years to 15 years), or convert from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage. The Wells Fargo Refinancing Mortgage Calculator helps you visualize the immediate financial impact of these changes.
A key consideration is the break-even point—the time it takes for the savings from the lower monthly payment to cover the upfront refinancing closing costs. If you plan to sell your home before reaching this point, refinancing might not be worthwhile, even with a lower rate.
How to Calculate Refinancing (Example)
Let’s use an example to illustrate the process:
- Determine New Principal: If your current balance is $200,000 and closing costs are $4,000, your new principal is $204,000.
- Find Monthly Rate and Payments: A 6.0% annual rate is 0.005 (0.5%) per month. A 30-year term is 360 payments.
- Apply the Formula: Input the values into the monthly payment formula to get the new monthly payment.
- Calculate Total Interest: Multiply the new monthly payment by the number of payments, then subtract the new principal.
Frequently Asked Questions (FAQ)
What credit score do I need for Wells Fargo refinancing?
While requirements vary based on the specific loan product, a FICO score of 620 or higher is generally considered the minimum for conventional refinancing. However, better rates are often available for scores above 740.
Are closing costs included in the new loan?
Yes, in a “no-cost” or “all-in-one” refinancing, the closing costs are typically rolled into the new loan principal. This calculator assumes costs are added to the principal balance.
How long does the refinancing process take?
On average, the process with a lender like Wells Fargo can take 30 to 45 days, depending on appraisal times, loan complexity, and documentation requirements.
Is there a penalty for prepaying the loan?
Most conventional mortgages in the U.S. do not have prepayment penalties. Always review your specific loan documents to confirm, but this is rare for primary residences.