Finance
Refinance Calculator
Compare your current loan with a refinanced one. See monthly savings, break-even point, and total interest difference.
Guide
How to use the Refinance Calculator
The Refinance Calculator helps you make a quick estimate, compare scenarios, and understand the numbers behind the result. It is designed for fast planning, with enough context to make the answer useful instead of just a number.
- Enter the amounts, rates, and time period that match the scenario you want to model.
- Review the main result first, then scan the supporting totals to understand what drives it.
- Change one input at a time to compare payments, interest, growth, savings, or break-even points.
Method
How this calculator works
It compares the current loan against the proposed refinance and estimates savings, total interest difference, and break-even timing.
This calculator is useful for deciding whether lower payments justify refinance costs.
Because assumptions matter, try a few values that represent optimistic, typical, and conservative cases.
Financial results are estimates. Actual loan terms, taxes, fees, rates, and market returns can change the final outcome.
Example
Worked example
Suppose you owe $300,000 at 7.5% with 25 years remaining — about $2,217 a month. Refinancing to 6.25% over the same 25 years drops the payment to about $1,979, saving $238 a month. With $6,000 in closing costs, you break even in roughly 25 months; stay longer than that and the refinance pays off.
FAQ
Common questions
When is refinancing worth it?
A common rule of thumb is that refinancing starts to make sense when you can cut your rate by around 0.75–1 percentage point and you plan to stay in the home past the break-even point — the month when accumulated monthly savings exceed your closing costs.
What are typical refinance closing costs?
Usually 2%–6% of the loan amount, covering origination, appraisal, title, and recording fees. On a $300,000 loan that is $6,000–$18,000, which is why the break-even calculation matters more than the monthly savings alone.
Does refinancing restart my loan?
If you refinance a loan with 25 years left into a new 30-year term, you lower the payment but add five years of interest. Comparing against a new term matching your remaining years (or shorter) shows the true saving.
What information do I need for the Refinance?
You usually need current balance, existing rate, new rate, new term, closing costs, and monthly savings. You can change the inputs and recalculate as many times as needed.
How does the Refinance calculate the result?
It compares the current loan against the proposed refinance and estimates savings, total interest difference, and break-even timing.
Are the results exact?
Financial results are estimates. Actual loan terms, taxes, fees, rates, and market returns can change the final outcome.
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Sources