Refinance Calculator

Use the Refinance Calculator

Your results

Current monthly payment: $0.00
New monthly payment: $0.00
Monthly savings: $0.00
Break-even time: 0 months
Total interest saved: $0.00

How this calculator works

What it does: Compare current and refinanced loan payments, estimate break-even time, and measure potential lifetime interest savings.
Inputs used: The estimate uses current loan balance, current annual interest rate (%), current remaining loan term (years), new annual interest rate (%), new loan term (years), and closing costs / refinance fees.
Calculation approach: The calculator applies the relationships defined for the refinance calculator to those inputs and updates current monthly payment, new monthly payment, monthly savings, break-even time, and total interest saved.
How to read the result: Treat the result as a scenario based on the values entered. Compare a few reasonable inputs and consider costs, taxes, timing, or risks that the calculator does not include.

How to Use This Calculator

Enter Current loan balance and Current annual interest rate (%) using values that match the scenario you want to evaluate.
Enter Current remaining loan term (years) and New annual interest rate (%) using values that match the scenario you want to evaluate.
Enter New loan term (years) and Closing costs / refinance fees using values that match the scenario you want to evaluate.
Review the assumptions for the refinance calculator, especially rates, time periods, and optional amounts.
Select Calculate to update the results, then adjust one input at a time to compare scenarios.

Understanding the Results

Current monthly payment: The estimated payment or withdrawal amount produced by the current balance, rate, and time assumptions.
New monthly payment: The estimated payment or withdrawal amount produced by the current balance, rate, and time assumptions.
Monthly savings: The monthly savings estimated by the Refinance Calculator using current loan balance, current annual interest rate (%), and current remaining loan term (years) and the other values entered.
Break-even time: The break-even time estimated by the Refinance Calculator using current loan balance, current annual interest rate (%), and current remaining loan term (years) and the other values entered.
Total interest saved: The total interest saved estimated by the Refinance Calculator using current loan balance, current annual interest rate (%), and current remaining loan term (years) and the other values entered.

Common Mistakes

Entering an annual interest rate as a monthly rate, or leaving out fees and required payments.
Assuming the quoted monthly payment includes taxes, insurance, or other costs when it may cover principal and interest only.
Ignoring whether a payment is high enough to cover the interest added each month.
Comparing payments without also comparing payoff time and total cost.

Worked Example

Example inputs

Current loan balance: $300,000
Current annual interest rate (%): 7%
Current remaining loan term (years): 25
New annual interest rate (%): 5.5%
New loan term (years): 20
Closing costs / refinance fees: $6,000

Example results

Current monthly payment: $2,120.34
New monthly payment: $2,063.66
Monthly savings: $56.68
Break-even time: 8 years, 10 months
Total interest saved: $134,822.42

For this illustrative scenario, the current monthly payment is $2,120.34. Changing any input can materially change the result, so use the example as a walkthrough rather than a guarantee.

Frequently asked questions

How is refinance break-even time calculated?

Break-even time divides closing costs by monthly payment savings. It estimates how long the lower payment must continue before recovering upfront refinance costs.

What if refinancing does not lower my monthly payment?

There is no payment-based break-even point when monthly savings are zero or negative. A refinance may still have other goals, but its total costs and loan term need careful review.

Can a lower interest rate still cost more overall?

Yes. Extending the repayment term can increase lifetime interest even with a lower rate, especially after adding closing costs.

What costs should I include as refinance fees?

Include lender fees, appraisal, title services, recording charges, points, and other costs paid to complete the refinance.

Does this calculator include taxes or escrow changes?

No. It compares principal and interest only. Property taxes, insurance, escrow adjustments, prepayment penalties, and tax consequences are excluded.

What does the Refinance Calculator calculate?

Compare current and refinanced loan payments, estimate break-even time, and measure potential lifetime interest savings. The result is based only on the inputs and assumptions shown on the page.

How should I interpret the new monthly payment from the Refinance Calculator?

Use it as an estimate for the scenario entered, not as a guarantee or personal recommendation. Test changes to current loan balance, current annual interest rate (%), and current remaining loan term (years) to see which assumptions have the greatest effect.