Refinance Calculator
Calculate whether refinancing saves money after closing costs. Compare current vs new payment, interest savings, and break-even timeline.
Refinancing: When the Math Actually Works
Refinancing headlines focus on lower rates — but closing costs can eat those savings if you don't stay in the loan long enough. The break-even point is the key number: how many months of lower payments before you've recovered what you spent to refinance.
This calculator compares your current loan against a proposed refinance, including closing costs in the analysis. You'll see monthly payment change, lifetime interest difference, and net savings after fees.
Extending your term while refinancing is a common trap. You might get a lower rate AND a lower payment, but if you reset from 22 years remaining to a new 30-year term, you could pay more total interest despite the rate drop. Always compare lifetime cost.
If refinancing saves monthly cash flow, consider applying the difference to principal — either on the new loan or toward higher-APR consumer debt. That turns a payment reduction into actual wealth building or faster debt freedom.
How These Calculations Work
Transparent methodology — no black boxes. Here's exactly what happens when you use this calculator.
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Enter current loan balance, APR, and months remaining.
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Enter proposed new APR, term, and estimated closing costs.
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We calculate current vs refinanced monthly payment and total interest.
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Net savings subtracts closing costs from lifetime interest reduction.
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Break-even shows how many months until closing costs are recovered.
Frequently Asked Questions
Refinancing makes sense when interest savings exceed closing costs within a timeframe you'll keep the loan — typically if you can lower your rate by 0.5–1% or more.
Appraisal, title, origination, and other fees typically run 2–5% of the loan amount. Enter your estimated total in the calculator.
The month when cumulative payment savings equal closing costs. If you sell or refinance again before break-even, you lose money on the deal.
A longer term lowers monthly payment but may increase total interest even at a lower rate. Compare lifetime cost, not just payment.
Yes — enter your current balance, rate, remaining months, and proposed new terms for any fixed-rate installment loan.