About the Refinance Calculator
Refinancing replaces your current loan with a new one, usually to get a lower rate, change the term, or both. Because refinancing has closing costs, the break-even point — closing costs divided by monthly savings — is a useful first check.
The comparison shows current and new loans side by side with the numerical differences, without labelling either as the better choice.
How It Works
The new payment uses the standard amortization formula for the current balance, new rate, and new term. Monthly savings are your current principal-and-interest payment minus the new one.
Interest savings compare the interest left on your current loan (paying as scheduled) with the total interest on the new loan. Extending the term can lower the payment but may increase total interest, and the table shows both.
Formula
Example
A homeowner owes $300,000 at 7.5% with 27 years left and considers a new 30-year loan at 6% with $6,000 in closing costs.
Inputs
- Current P&I
- $2,162.20
- New rate / term
- 6.00% · 30 years
- Closing costs
- $6,000
Results
- New payment
- $1,798.65
- Monthly savings
- $363.55
- Break-even
- 17 months
The new 30-year term adds three years of payments compared with the 27 remaining, which the comparison table shows alongside the interest difference.
Assumptions & Limitations
- Principal and interest only; taxes and insurance usually stay the same after a refinance.
- Closing costs are paid in cash, not rolled into the new loan.
- Both loans are fixed-rate and paid as scheduled, without extra payments.
- Rates are your inputs; this calculator does not supply or recommend rates.
Understanding Your Results
- Monthly Savings: How much lower (or higher) the new principal-and-interest payment is.
- Break-even Period: Months of savings needed to recover closing costs. Shown as "No break-even" when the payment does not go down.
- Total Interest Savings: Remaining interest on your current loan minus total interest on the new loan; negative means more interest.