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About the refinance calculator
To refinance is to replace your loan with a new one, usually at a lower interest rate. A lower rate lowers your monthly payment, but the new loan has closing costs. The real question is: how long until the savings pay those costs back?
Type your loan now (Balance, Interest rate per year, Years left) and the new loan (Interest rate per year, Loan term, Closing costs). The calculator shows:
- How much less per month you pay
- The time to earn back the closing costs
- The monthly payment, now → new
- The interest still to pay, now → new
- The money saved over the life of the loan, after closing costs
It works for a mortgage, but also for a car loan or any loan with fixed monthly payments.
Features
- Monthly savings — see how much less (or more) you pay each month with the new loan
- Break-even time — how many years and months until the savings pay back the Closing costs
- Now and new side by side — the monthly payment and the interest still to pay, for both loans
- Life-of-loan savings — the total saved, or the extra cost, after closing costs
- Roll in the costs — under More options, tick Add the closing costs to the new loan
- Longer-loan warning — a note when the new loan runs longer than what is left now
- 47 currencies — pick your Currency; the choice is remembered and used by the other money tools too
- Private and saved — it all works in your browser, nothing is uploaded, and your numbers stay on this device for next time
How to use it
- Under Your loan now, type the Balance, the Interest rate per year and the Years left
- Under The new loan, type the new Interest rate per year, choose the Loan term and type the Closing costs
- Open More options and tick Add the closing costs to the new loan if you will not pay them in cash
Example with the starting numbers
A $250,000 balance at 7.5% with 25 years left. The new loan is 6% for 25 years, with $4,000 of closing costs:
| Result | Amount |
|---|---|
| Less per month | $236.72 |
| To earn back the closing costs | 1 yr 5 mo |
| Monthly payment, now → new | $1,847.48 → $1,610.75 |
| Interest still to pay, now → new | $304,243 → $233,226 |
| Saved over the life of the loan | $67,017 |
$4,000 ÷ $236.72 is about 17 months. After that, every month of savings is real money in your pocket.
How the new rate changes the savings
Same loan ($250,000, 7.5%, 25 years left), new loan for 25 years, $4,000 closing costs:
| New rate | New payment | Less per month | Break-even | Saved over the life of the loan |
|---|---|---|---|---|
| 7.0% | $1,767 | $81 | 4 yr 2 mo | $20,159 |
| 6.5% | $1,688 | $159 | 2 yr 2 mo | $43,838 |
| 6.0% | $1,611 | $237 | 1 yr 5 mo | $67,017 |
| 5.5% | $1,535 | $312 | 1 yr 1 mo | $89,678 |
| 5.0% | $1,461 | $386 | 11 mo | $111,801 |
A shorter or longer new loan
The new rate is 6%. Only the Loan term changes:
| New loan term | New payment | Per month | Saved over the life of the loan |
|---|---|---|---|
| 15 years | $2,110 | $262 more | $170,508 |
| 20 years | $1,791 | $56 less | $120,385 |
| 25 years | $1,611 | $237 less | $67,017 |
| 30 years | $1,499 | $349 less | $10,648 |
A 30-year loan has the lowest payment, but you pay for 5 more years, so it saves very little in total. A 15-year loan costs more each month and saves the most. When the new loan runs longer than what is left now, the calculator shows a short warning.
Frequently asked questions
When is it worth it to refinance?
When you will keep the loan longer than the break-even time. If the closing costs are paid back in 17 months and you stay 5 more years, refinancing pays off. If you plan to sell next year, it may not.
How do I calculate the refinance break-even point?
Divide the closing costs by the monthly savings. $4,000 ÷ $236.72 is 16.9, so about 17 months. The calculator rounds it up and shows it in years and months.
Should I add the closing costs to the new loan?
It means no cash today, but a bigger loan, a slightly higher payment and more interest. In the example, the payment becomes $1,636.53 instead of $1,610.75. Tick the box under More options to compare.
Why can a lower payment cost more in the end?
If the new loan is longer than the years left, you pay interest for more years. A lower monthly payment does not always mean less money paid in total. Look at saved over the life of the loan.
Can I use it for a car loan or a personal loan?
Yes. Type the balance, rate and years left of any loan with fixed monthly payments, then the new offer.
Is this financial advice?
No. It is a planning tool. Your lender's real rate, fees and rules decide the final numbers.
Good to know
- Works with any currency — choose it at the top
- Years left can be a decimal, for example 22.5
- Your numbers are saved only in this browser
- Nothing you type is sent anywhere
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