CalcArcade.

Refinance Calculator

Enter your current loan, the new rate and term, and the closing costs. You get the payment change, the break-even time and the change in total paid.

Your numbers

Result

Estimate for information only, not professional advice. Last reviewed .

How we calculate it

Each payment is the standard loan payment P × r ÷ (1 − (1 + r)^−n). The current payment uses your balance, current rate and the years left. The new payment uses the balance (plus the closing costs if you roll them in), the new rate and the new term. The saving is the old payment minus the new one, and the break-even time is the closing costs divided by the monthly saving, rounded up to a whole month.

For example, a 300,000 balance at 6% with 30 years left has a payment of 1,798.65. Refinancing at 4.5% for 30 years gives 1,520.06, a saving of 278.59 a month. With 5,000 of closing costs the break-even point is 18 months.

Assumptions and limits

  • These are payments of principal and interest only. Taxes, insurance and mortgage insurance are not included.
  • A new term restarts the clock. If the terms differ, compare the change in total paid with care, because a longer loan can lower the payment and still cost more interest.
  • Break-even assumes you keep the new loan at least that long and that closing costs are paid up front. If you roll the costs in, there is no up-front cost to recover.

Frequently asked questions

How long does it take to break even on a refinance?

Divide the closing costs by the monthly saving. With 5,000 of costs and a saving of 278.59 a month, you break even in 18 months, so refinancing pays off if you keep the loan longer than that.

Should I roll the closing costs into the loan?

It saves cash today but you borrow and pay interest on the costs for the whole term. The calculator shows the payment and the change in total paid with the costs rolled in.

Why does my total paid go up even though the payment falls?

If the new term is longer than the years you have left, you pay for more months. A lower payment over more months can cost more in total.

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Worked example (a fixed example using the starting numbers, it does not change as you type)

Inputs: Current loan balance = 300000; Current interest rate (%) = 6; Years left on the current loan = 30; New interest rate (%) = 4.5; New loan term (years) = 30; Closing costs = 5000; Closing costs are = Paid up front.

  • Monthly payment change -$278.60
  • Current payment $1,798.65
  • New payment $1,520.06
  • Break-even 18 months (1 year 6 months)
  • Interest on current loan $347,514.57
  • Interest on new loan $247,220.13
  • Change in total paid -$95,294.43

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Last reviewed: . Formulas and assumptions are described on our methodology page. For information only; not professional advice.