Refinancing can save you money over the life of your loan, and locking in a lower rate is just the first step.

1. The calculator assumes you will invest your savings. To get a full picture of your maximum potential savings in any refinance scenario, this calculator assumes that you’ll be investing the money you’ve saved—building wealth by putting that extra money toward stocks and bonds. The calculator applies a conservative estimate of a 3.5% return on your investment, but you can decrease or increase this amount in the “Advanced Settings” section of the calculator. (If you keep most of your savings in a bank account, decrease this number to 0%. If you invest most of your savings in the stock market, increase it to 6%.
   
   
2.  The calculator assumes you will claim tax deductions. Refinancing can also qualify you for tax deductions—for example, interest payments made on the refinanced loan can be deducted from your overall taxable income. Because of this, the calculator figures that you’ll lower your overall marginal tax rate by applying for standard deductions after you refinance. The calculator will default to a future and marginal tax rate of 28%, but this figure can be adjusted under the “Advanced Settings” section based on your income bracket and which deductions you expect to claim. Note that the tax rules for cash-out refinances are slightly different, and might limit the deductions you qualify for. If you don’t already know how your tax deductions are filed, speak to your tax professional. They will understand your unique financial circumstances and, as experts in the tax code, they can give tailored advice for your situation.