Determine a discount rate and compare two loans. Most individuals or mortgage brokers ONLY look at the difference in the monthly payment or the sum of those differences in payments in advising you to refinance, however this simple method does NOT take into consideration the present value (PV) of those cash flows.
Compare Two Mortgages Using PV
 
New
  
Old
  
Original Balance
$
 
$
 
Mortgage Rate
%
%
Mortgage Term (Years)
 
 
Remaining Balance
N/A
  
 
   
How Long Do You Expect Too Live In The Home?
   
Enter a Discount Rate:
%
Enter the Cost to Refinance: $      
         
 
Please do not leave any box empty. If you do not want to include a variable then enter zero. Adjust the numbers to coincide with your circumstances.