INTEREST ONLY CALCULATOR
This tool estimates your monthly mortgage payment for an interest-only loan. An interest-only loan is a loan in which the borrower pays only interest payments and doesn't pay off any of the loan balance at the beginning of the loan. After the interest-only period, payments are increased to repay the principal fully in the remaining time. The longer the interest-only period lasts, the sharper the monthly payment will jump once the interest-only period ends.
This tool calculates your mortgage settlement charges (or closing costs) for a given set of loan terms. The calculator lumps settlement charges into two categories: origination charges and other settlement services.
Refinancing generally makes sense if you can lower your monthly payment by enough to cover the associated settlement charges (or closing costs). Often, the break-even point for a refinance is two to three years. If you plan to sell your home within a year or so, refinancing may not make sense.
RENT OR BUY DETERMINATION
When you buy a home, you'll pay thousands of dollars in closing costs, inspection fees and taxes. These fees are small when compared to the total amount of your mortgage, but they can add up to about a year's worth of rent. If you quickly sell a home you just bought, you could lose these sunk costs with nothing to show for them.
You also risk losing money on the value of your home. While real estate prices generally rise over time, a down market within a few years after your original purchase can send your home's value below what you paid for it.
Buying a home should be a long-term investment. If you might change jobs, need a larger house for children or downsize when your kids go to college within the next five years, you may want to keep renting.