Refinance Calculator

Use this calculator to estimate whether refinancing may reduce your monthly payment or total loan cost. It compares your current remaining loan with a new loan, including refinance fees.

What this calculator does

The refinance calculator compares current and new loan terms.

It uses:

• current balance and rate
• current remaining term
• new rate and term
• refinance fees

The result shows monthly savings, net savings, and break-even time.

How to use the refinance calculator

Enter your current balance, current rate, remaining years, new rate, new term, and refinance fees. The calculator estimates both payment paths and compares costs.

Use the result to decide whether lower payments justify fees and any term extension.

Refinance Formula

Monthly savings = current monthly payment - new monthly payment

Break-even months = refinance fees / monthly savings

Net savings = current remaining cost - new loan cost - fees

Example calculation

If:

• Current payment = 1,500
• New payment = 1,300
• Refinance fees = 4,000
• Monthly savings = 200

Then:

Break-even months = 4,000 / 200 = 20

It takes about 20 months to recover the refinance fees.

What is refinancing?

Refinancing replaces an existing loan with a new loan. Borrowers often refinance for a lower rate, lower payment, different term, or debt restructuring.

Lower monthly payments do not always mean lower total cost.

Interpreting your result

If break-even is longer than you expect to keep the loan, refinancing may not be worthwhile. Also check whether the new term increases total interest.

When to use this calculator

Use this calculator when you want to:

• compare refinance offers
• estimate break-even time
• review monthly savings
• test new loan terms

Common mistakes

Common mistakes include:

• ignoring refinance fees
• extending the loan too far
• comparing payment only
• overlooking prepayment penalties

FAQs

What is break-even time?

It is the time needed for monthly savings to recover refinance fees.

Can refinancing cost more?

Yes, especially if fees are high or the term is extended.

Does this include all closing costs?

Only the fees you enter.

Is this financial advice?

No. It is a planning estimate only.