Finance

Refinance Calculator

Compare your current mortgage or loan with a new refinanced loan to see monthly savings, total interest saved, and how long it takes to break even on closing costs.

Current Loan

$

New Loan

$

Enter your loan details above to compare options.

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Monthly Payment & Break-Even Formula

Monthly payment is derived from the standard loan amortisation formula. Break-even divides closing costs by monthly savings.

M = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1]

P = balance, r = monthly rate, n = months

Break-Even = Closing Costs ÷ Monthly Savings

Should You Refinance Your Mortgage?

Refinancing replaces your existing loan with a new one, typically at a different interest rate or term. The primary motivations are lowering monthly payments, reducing the total interest paid over the loan life, switching from a variable to a fixed rate, or shortening the repayment period.

The break-even analysis is the most important number in any refinance decision. It tells you exactly how many months you must stay in the property (or keep the loan) for the monthly savings to exceed the upfront cost of refinancing. If you plan to sell before reaching that point, refinancing may not be worth it financially.

Note that extending your loan term reduces monthly payments but often increases total interest. This calculator shows both figures so you can make the trade-off explicitly rather than focusing only on payment reduction.

Frequently asked questions

When does it make financial sense to refinance a mortgage?
Refinancing typically makes sense when the new interest rate is at least 0.5 to 1 percentage point lower than your current rate, you plan to stay in the home long enough to recoup closing costs, and your credit score qualifies for a competitive rate. The break-even calculation is the clearest way to decide.
What is the refinance break-even period?
The break-even period is the number of months required for your accumulated monthly savings to equal the total closing costs you paid upfront. If you pay $4,000 in closing costs and save $200 per month, you break even in 20 months. If you plan to stay in the home beyond that point, refinancing is likely financially beneficial.
What closing costs should I include in the calculation?
Typical refinancing closing costs include origination fees, appraisal fees, title insurance, recording fees, and prepaid interest. Total costs commonly range from 2% to 5% of the loan balance. Some lenders offer no-closing-cost refinances that roll fees into a slightly higher rate, which the calculator also handles by setting closing costs to zero.
Does refinancing to a longer term increase total interest paid?
Yes. Extending your loan term reduces monthly payments but increases the total interest paid over the life of the loan. For example, refinancing a 15-year remaining balance into a new 30-year loan at a lower rate will reduce your monthly payment significantly but may result in paying more total interest. Always compare total interest savings in addition to monthly savings.
Can I use this calculator for auto loans or personal loans?
Yes. The calculator applies the standard amortisation formula and works for any fixed-rate installment loan including auto loans, personal loans, and student loans. Simply enter the remaining balance, current rate, remaining term, and the proposed new rate and term to compare your options.
How does a lower interest rate affect my total interest paid over the loan life?
Even a small reduction in interest rate can save tens of thousands of dollars over a long loan term. On a $300,000 mortgage, dropping from 6.5% to 5.0% over 25 years reduces total interest by roughly $60,000 to $80,000. The total interest savings field in this calculator shows exactly how much you stand to save across the full repayment period.

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