🏠 HARP Refinance Calculator
Estimate your new monthly payment, interest savings, and break-even point under HARP-style refinancing
| Rate Drop | From Rate | To Rate | Monthly Savings | Annual Savings | 10-Year Total |
|---|---|---|---|---|---|
| 0.25% | 6.00% | 5.75% | ~$38 | ~$456 | ~$4,560 |
| 0.50% | 6.00% | 5.50% | ~$77 | ~$924 | ~$9,240 |
| 0.75% | 6.50% | 5.75% | ~$116 | ~$1,392 | ~$13,920 |
| 1.00% | 6.50% | 5.50% | ~$154 | ~$1,848 | ~$18,480 |
| 1.50% | 7.00% | 5.50% | ~$232 | ~$2,784 | ~$27,840 |
| 2.00% | 7.50% | 5.50% | ~$311 | ~$3,732 | ~$37,320 |
| Home Value | Loan Balance | LTV Ratio | HARP Eligible? | Underwater By |
|---|---|---|---|---|
| $200,000 | $160,000 | 80% | Standard Refi | No |
| $200,000 | $180,000 | 90% | Yes (HARP) | No |
| $200,000 | $210,000 | 105% | Yes (HARP) | $10,000 |
| $200,000 | $240,000 | 120% | Yes (HARP) | $40,000 |
| $200,000 | $260,000 | 130% | Yes (HARP) | $60,000 |
| $200,000 | $300,000 | 150% | Yes (HARP) | $100,000 |
| Refi Costs | $50/mo Savings | $100/mo Savings | $150/mo Savings | $200/mo Savings |
|---|---|---|---|---|
| $1,500 | 30 months | 15 months | 10 months | 8 months |
| $2,500 | 50 months | 25 months | 17 months | 13 months |
| $3,500 | 70 months | 35 months | 24 months | 18 months |
| $5,000 | 100 months | 50 months | 34 months | 25 months |
| $7,500 | 150 months | 75 months | 50 months | 38 months |
The Affordable Home refinance Program, commonly called HARP, worked as a federal program that the Federal Housing Finance Agency launched in March 2009. It aimed to help homeowners that had only little or any equity in their homes so that they could change their mortgage loans to lower interest or to a safer kind of loan. This program appeared mainly because of the financial crisis of 2008 and the resulting crash of the housing market.
Many homeowners found themselves in a tough situation when the market crashed and home prices sank. They were forced to pay more than their properties were worth. The usual banks refused to refinance those loans that were underwater.
How HARP Helped Homeowners Refinance
HARP however changed the situation. The state told Fannie Mae and Freddie Mac to support such refinance efforts, even though the loan amount passed the value of the property.
HARP mainly allowed borrowers whose mortgages were backed by Fannie Mae or Freddie Mac to refinance even if the ratio between loan and value passed 80 percent. At first only those with a ratio of 105 percent could take part. Later it was updated to HARP 2.0, which opened the program for many more underwater homeowners that wanted to refinance.
There were several rules for getting in. The mortgage had to be older than May 31st 2009. Usually a credit score of at least 620 was expected.
Those owners that fell behind or could not pay their mortgage payments could not enter the program. To get in you had to file a request, pass a credit check and pay the usual fees for the refinance.
Thanks to HARP some owners managed to drop there interest rates from around 5.7 percent down to the upper three-percent level. Others reached 3.75 percent for a loan of 15 years. It was especially useful for those that bought their home before the crisis and later suffered a huge drop in prices.
On August 17th 2017, the Federal Housing Finance Agency announced a new extension of HARP, that would last until December 31st 2018. At the same time they planned the Easy Interest refinance Program, that would start for loans issued since October 1st 2017. HARP officially ended in December 2018.
When HARP ended, two new choices appeared. Fannie Mae launched its HIRO program, and Freddie Mac created FMERR. But both were stopped in August 2021 because of too few applicants.
For borrowers with underwater mortgages there are still other options, for example the FHA program for refinance with easy interest. Should a new big drop inhome prices happen, maybe a law will return that will allow refinance with a high ratio between loan and value, similar to HARP.
