Should You Refinance Your Rental (US)?

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Evaluate refinancing your rental property mortgage using Eva’s missed investment value method, factoring in penalties, legal fees and deductible interest.

Last update Dec 2024
  • Scenario 1: Cost of Refinancing Mortgage
  • Scenario 2: Cost of Keeping Current Mortg.
  • Which One Is Higher (%)

Compare refinancing vs. keeping your rental property mortgage using the missed investment value of payments, adjusted for fully tax-deductible interest. This approach highlights lost growth potential and the tax impact for US investors.

# Years from Now
Try your numbers:

The remaining balance on your current rental property mortgage.

A =

The interest rate on your existing rental property mortgage.

B =

The number of years left on your current mortgage term.

C =

The interest rate you are being offered for the new mortgage.

D =

The length of the new mortgage term, typically reset to 30 years for US rental properties.

E =

The penalty cost for breaking your current mortgage, if applicable.

F =

The estimated legal and administrative costs for refinancing.

G =

Any additional costs associated with refinancing.

H =

Your marginal income tax rate. Used to calculate the tax-deductible impact of mortgage interest payments.

I =
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  • Amount
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Time Value Assumptions

Heads Up!

If you're using Cost Basis (cb) for calculating capital gains:

Please be aware that very few countries currently use inflation-indexed cost basis. Double-check your local tax rules before publishing.

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How is Cash Value calculated?

This scenario evaluates the total cost of refinancing your rental property mortgage by summing the missed investment value of payments and the benefits of a potentially lower rate. It accounts for penalties, legal fees, and the full deductibility of interest to determine whether refinancing is financially advantageous for US rental property owners.

Decisions / Expectations

(Expressions are evaluated at Year 0 only.)

J =
0

Calculations

(Expressions are evaluated at every year.)

K̃ =
L̃ =
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