Refinance calculator
Enter what you still owe, your current rate and remaining time, then the rate, term and closing costs of the new loan. The calculator shows whether the lower payment is worth the cost of refinancing and how long it takes to break even.
Runs in your browser: nothing you enter is sent anywhere.
How to use it
- Enter the balance you still owe and your current rate.
- Enter the years left on your current loan. Decimals work: 17.5 is 17 years and 6 months.
- Enter the new rate, the new term and the closing costs.
- Read the new payment, the monthly savings and the break-even point.
How it works
Both payments use the level-payment formula, payment = balance × r ÷ (1 − (1 + r)^−n), with r the yearly rate divided by 12 and n the number of months. Monthly savings are the current payment minus the new one. The break-even point is closing costs ÷ savings, rounded up. Interest on each loan is payment × months − balance, and the lifetime saving is the old interest minus the new interest minus the closing costs.
Worked example
A 250,000 balance at 7% with 25 years left costs 1,766.95 a month. A new 25-year loan at 5.5% costs 1,535.22, a saving of 231.73 a month. With 4,000 of closing costs you break even after 18 months. Interest falls from 280,084.40 to 210,565.62, so after costs you keep 65,518.78 over the full term.
Things to keep in mind
- Restarting a 30-year clock on a loan that is nearly paid off can raise total interest even at a lower rate. Keep the term the same to compare fairly.
- Only the time you will really keep the loan matters for break-even.
- Prepayment penalties on the old loan are not included; add them to the closing costs.
These are estimates to help you compare options, not financial advice.
Frequently asked questions
When does refinancing make sense?
When the monthly savings repay the closing costs within the time you expect to keep the loan. If the break-even point is 18 months and you will sell in 12, you lose money even though the payment is lower.
How is the break-even point calculated?
Closing costs divided by the monthly savings, rounded up to whole months. 4,000 of costs and 231.73 of savings a month gives 17.26, so 18 months. If the new payment is not lower, there is no break-even point and the field is empty.
Why can a lower payment still cost more overall?
A longer term lowers the payment but adds months of interest. Compare the lifetime saving, which is the interest left on the current loan minus the interest on the new loan minus closing costs. It can be negative even when the monthly payment falls.
Are the closing costs added to the new loan?
No. They are treated as cash paid up front and the new loan equals your current balance. If you roll the costs into the loan, add them to the balance yourself and use zero for closing costs.
Does this match my lender's offer?
It is a close estimate. Both loans are fixed-rate with level monthly payments and interest at one twelfth of the yearly rate each month. Lenders may round payments or count days differently, and the quote may include taxes and insurance.