Refinance Calculator

How the Calculator Works

This calculator compares two scenarios:

1. Your current loan (balance, rate, remaining term)
2. Your new refinanced loan (new rate, new term, closing costs)

It estimates monthly savings and calculates how many months it takes to recover refinance costs.

Break-even formula:
Break-even = Closing Costs ÷ Monthly Savings

If closing costs are $5,000 and monthly savings are $200, your break-even point is 25 months — meaning after two years, you start saving real money.

Formula & Explanation

Our tool uses the same amortization formula as the mortgage calculator but applies it twice: once for your existing loan and once for the new one. It then compares the two monthly payments and total interest paid over time.

Example Calculation

Suppose you owe $250,000 on a 30-year loan at 6% with 25 years left. Refinancing into a 25-year loan at 5% drops your payment from $1,610 to $1,462 — a $148 monthly savings. If closing costs are $4,000, your break-even time is about 27 months.

How to Use This Tool

1. Enter your current loan details (balance, rate, term left).
2. Enter new loan info (new rate, new term, closing costs).
3. Click "Calculate."
4. Review your monthly savings, interest savings, and break-even point.

Features & Benefits

• See if refinancing saves money
• Calculates break-even period
• Compares old vs. new total interest
• Shows monthly and lifetime savings
• Ideal for mortgage refinancing decisions

Related Tools

• Mortgage Calculator
• Amortization Schedule Calculator
• Loan Comparison Calculator