Refinance Calculator

How to use this calculator

1. Enter or choose current loan balance.
2. Enter or choose current interest rate.
3. Enter or choose months left on current loan.
4. Enter or choose new interest rate.
5. Enter or choose new loan term.
6. The monthly saving updates as you type. Use Copy result or Share to keep it.

Method

Payment = P × i × (1 + i)^n ÷ ((1 + i)^n − 1); Monthly saving = Current payment − New payment; Break-even months = Costs ÷ Monthly saving (rounded up); Lifetime saving = Current payment × months left − (New payment × new term + costs paid in cash)

P

loan balance (plus costs if they are added to the new loan)

i

monthly rate

n

months

Worked example

1. Current: $250,000 at 7% over 300 months = $1,766.95 a month.
2. New: $250,000 at 5.5% over 300 months = $1,535.22, saving $231.73 a month.
3. Break-even: 4,000 ÷ 231.73 = 17.3, so 18 months. Over the full term you save ≈ $65,518.78 after costs.

Refinancing from 7% to 5.5% saves $231.73 a month and recovers the $4,000 cost in 18 months.

What the result means

If you expect to sell or refinance again before the break-even month, the refinance loses money. A longer new term lowers the payment but can raise total interest, so check the lifetime saving as well as the monthly one.

Assumptions and limits

• Both loans are fixed-rate with level monthly payments, and the current payment is recalculated from the balance, rate and months left.
• Property tax and insurance are unchanged, so they are left out.
• The simple break-even ignores the time value of money and differences in how fast each loan builds equity.
• Cash-out refinancing and mortgage insurance changes are not modelled.