Refinance Calculator

Compare your remaining loan with a new refinance loan and estimate the break-even point

Your result will appear here.

About the Refinance Calculator

Refinancing replaces an existing loan with a new one, usually to change the interest rate, payment or term. The useful question is whether the future savings justify the upfront costs and any extension of the repayment period.

A lower monthly payment can come from a lower rate, a longer term or both. Extending the term may reduce monthly pressure while increasing the amount of time you remain in debt.

How to Use the Refinance Calculator

  1. Enter the current loan balance, rate, payment and remaining term.
  2. Enter the proposed new rate and new term.
  3. Add closing costs or refinance fees that must be paid or financed.
  4. Calculate payment savings, interest difference and break-even time, then compare those results with how long you expect to keep the loan.

How the Calculation Works

The current loan and proposed loan are each modeled using their own remaining balance, rate and term. The payment difference gives monthly cash-flow savings or increase.

Break-even time is commonly estimated as refinance costs ÷ monthly savings when savings are positive, while total-interest comparison considers the full projected life of both loans.

Worked example

Refinance Calculator Worked Example

$4,000 closing costs and $200 monthly savings

Simple break-even time = $4,000 ÷ $200 = 20 months. If you expect to sell or refinance again before 20 months, the upfront cost may not be recovered through payment savings.

Result guide

Understanding Your Refinance Calculator Result

Break-even time is only one part of the decision. A refinance can lower monthly cost while increasing total interest if the new term restarts the repayment clock for many years.

Before you rely on the answer

Assumptions and Limitations

  • Current and proposed rates are modeled as stated.
  • Closing costs are entered accurately and treated according to whether they are paid upfront or financed.
  • Future taxes, insurance and loan changes are excluded unless included.

Practical tip

Using This Result in Practice

Compare the new loan with the remaining term of the old loan, not only with a fresh 30-year payment. Matching terms makes the true rate savings easier to see.

Related calculations

Useful Calculations to Continue With

If the refinance is for a mortgage, use the Mortgage Calculator to confirm the new principal-and-interest payment independently.

If the new loan includes discount points, use the Mortgage Points Calculator to evaluate the upfront cost separately.

Authoritative references

Useful Official Sources

For standards, definitions or real-world guidance related to this calculation, these primary sources may be useful:

Common questions

Refinance Calculator FAQ

How do I know when refinancing breaks even?

Divide the upfront refinance cost by the monthly savings for a simple break-even estimate, provided the monthly savings are positive.

Can refinancing lower my payment but cost more overall?

Yes. A longer new term can reduce the monthly payment while keeping debt outstanding longer and increasing total interest.

Should I finance closing costs into the new loan?

That can reduce cash needed upfront but increases the new principal and usually the interest paid on those costs.