Refinance Calculator

Written byOleh Soloninupdated 25 September 2026

Currency

Outstanding balance

Current rate, %

Months remaining

New rate, %

New term, months

Arrangement costs

Result

Current payment

$2,069.18

New payment

$1,936.32

Payment falls by

$132.85

Interest now

$340,752.59

Interest after

$300,896.22

Total repaid now

$620,752.59

Total repaid after, with costs

$585,896.22

Saving

$34,856.37

Break-even, months

Working

Now: 2,069.18 × 300 = 620,752.59, interest 340,752.59 After: 1,936.32 × 300 + 5,000.00 = 585,896.22, interest 300,896.22 Saving: 620,752.59 − 585,896.22 = 34,856.37 Costs repaid: 5,000.00 ÷ 132.85 = 37.6 months

The new loan at other terms

     Term        Payment         Interest           Saving
    60 mo       5,512.69        50,761.12       284,991.47
   120 mo       3,216.51       105,981.11       229,771.48
   180 mo       2,479.30       166,273.85       169,478.74
   240 mo       2,130.68       231,364.22       104,388.37
>  300 mo       1,936.32       300,896.22        34,856.37

This result is informational only and is not professional advice.

Payment, interest and savings when you refinance

Compare your current loan or mortgage with a refinance: the new payment, interest before and after, the saving after closing costs, how many months the costs take to recover, and a table by term that shows when a lower payment costs more.

Refinancing replaces an existing loan with a new one. The calculator compares both on the same balance: the monthly payment, the interest and the total repaid, with closing costs paid up front and counted in the total cost of the new loan, not added to the amount borrowed.

A payment can come down through a lower rate or a longer term, and only the rate always cuts the interest. The calculator warns you when the new term is longer and interest goes up, and a table shows the new loan at terms from 5 to 25 years.

How to use

Enter the balance, the current rate and the months left.
Enter the rate and term of the new loan.
Add the closing costs.
Read the new payment, interest before and after, the saving, the break-even month, the Working lines and the table by term.

How to work out whether refinancing saves money

Saving = total repaid on the current loan − (total repaid on the new loan + closing costs). Interest is the total repaid minus the balance. The break-even point is closing costs ÷ the drop in the monthly payment.

A balance of 280,000 at 7.5% with 300 months left costs 2,069.18 a month and 340,752.59 of interest. A new 300-month loan at 6.76% costs 1,936.32 a month and 300,896.22 of interest. With 5,000 of closing costs the saving is 34,856.37, and the costs are recovered after 38 months: 5,000 ÷ 132.85 = 37.6.

How much the rate needs to drop

The smaller the rate cut, the smaller the saving and the longer the costs take to recover. On the same loan, a new rate of 7% saves 22,058.06 and breaks even after 56 months; at 6% it saves 74,539.41 and breaks even after 19.

Balance 280,000, current rate 7.5%, 300 months left, closing costs 5,000. Worked out with this calculator.
New rate	New payment	Saving	Break-even
7%	1,978.98	22,058.06	56 months
6.76%	1,936.32	34,856.37	38 months
6.5%	1,890.58	48,578.57	28 months
6%	1,804.04	74,539.41	19 months
5.5%	1,719.44	99,919.10	15 months

When a lower payment costs more

Stretching the new loan lowers the payment further but adds interest. At 6.76% over 360 months the payment is 1,817.94, but interest rises to 374,457.06, more than the current loan, and with closing costs the refinance costs 38,704.47 more. A shorter term does the opposite: over 180 months the payment is 2,479.30 and the saving 169,478.74.

Balance 280,000; current loan 7.5% over 300 months, new loan 6.76%, closing costs 5,000. Worked out with this calculator.
New term	Payment	Interest	Saving
60 months	5,512.69	50,761.12	284,991.47
120 months	3,216.51	105,981.11	229,771.48
180 months	2,479.30	166,273.85	169,478.74
240 months	2,130.68	231,364.22	104,388.37
300 months	1,936.32	300,896.22	34,856.37

What this calculator shows

The current and new payment and the difference
Interest and the total repaid before and after
The saving after closing costs and the break-even month
A warning when a lower payment comes with more interest
The new loan at terms from 5 to 25 years

What to keep in mind

Both loans are standard amortising loans at a fixed rate.
Closing costs are paid up front and added to the new loan's total.
Money saved on the payment is not assumed to be invested.

FAQs

How do I know if refinancing is worth it?

Compare everything you would repay: the current loan against the new loan plus closing costs. 280,000 moving from 7.5% to 6.76% over 300 months repays 620,752.59 against 585,896.22, a saving of 34,856.37.

How do I calculate the break-even point on a refinance?

Closing costs ÷ the drop in the monthly payment: 5,000 ÷ 132.85 = 37.6, so about 38 months. That is when the lower payments alone cover the costs. If you plan to sell or repay early, also compare what is left to repay on each loan and any early-repayment charges: the new loan's balance may fall faster, so it can come out ahead sooner.

Why is a lower payment not always a saving?

Because a longer term lowers the payment too. At 6.76% over 360 months instead of 300 the payment drops to 1,817.94, but interest rises to 374,457.06 and the refinance costs 38,704.47 more.

Is it worth refinancing for a small rate drop?

Work it out with your numbers. On 280,000 over 300 months, 7.5% to 7% saves 22,058.06 but takes 56 months to recover 5,000 of costs.

Should I refinance to a shorter term?

It cuts the interest most, at the price of a higher payment: over 180 months at 6.76% the payment is 2,479.30 and the saving 169,478.74.

How do the default figures work out?

A balance of 280,000 at 7.5% with 300 months left costs 2,069.18 a month. At 6.76% over the same term the payment is 1,936.32, so 132.85 is saved each month; with 5,000 of fees the break-even point falls in month 38. Stay past it and the saving reaches 34,856 over the full term.

Worked example

280,000 from 7.5% to 6.76%

Input: Balance 280,000 at 7.5% with 300 months left; new loan 6.76% over 300 months; closing costs 5,000

Output: Payment 1,936.32 instead of 2,069.18; saving 34,856.37

Note: The costs are recovered after 38 months. Stretched to 360 months, the refinance would cost 38,704.47 more.

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