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Refinance Calculator

Compare your current loan against a refinanced loan. See monthly savings, interest savings, break-even period, and total net savings. Free refinance analysis tool.

Last revised 30 July 2026

By Team GlobalCalqulate · About our editorial standards

Current Loan

Current Balance ($)

Current Interest Rate (%)

Remaining Term (Years)

New Loan

New Interest Rate (%)

New Loan Term (Years)

Closing Costs ($)

Financial Disclaimer: This result is an educational estimate produced by applying a standard formula to the figures you entered. It is not an offer, a quotation, or financial advice: real costs and returns depend on a provider's pricing, fees and underwriting, and on circumstances this calculator does not collect. Confirm the figures with the provider or a qualified adviser before acting on them. Full disclaimer.

Sources & methodology

Formula:: Payment on each loan
Reference:: Consumer Financial Protection Bureau (CFPB)
Content last updated:: July 2026
Scheduled re-verification:: July 2027

Calculation type: Exact calculation. Figures are taken from Consumer Financial Protection Bureau (CFPB) — see sources below.

Your entries stay on this device. This calculator runs entirely in your browser — the figures you type are not sent to us or to anyone else. The page itself uses cookies for analytics and advertising, described in the privacy policy.

Formula & methodology

Formula used

Payment on each loan

PMT = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)

The current and proposed loans are both worked from the same outstanding balance.

Monthly saving

monthly saving = current payment − new payment

The immediate cash-flow improvement.

Break-even

break-even months = ⌈closing costs ÷ monthly saving⌉

How long the lower payment takes to repay the cost of refinancing. Rounded up to a whole month.

Net saving

net saving = interest saved − closing costs

The lifetime gain once the cost of the refinance is subtracted.

Variable definitions

Symbol	Meaning	Unit
balance	Current balance. the amount still owed on the existing loan	currency
rate	Interest rate. the annual rate on the current and the new loan	%
term	Term. years remaining on the current loan, and the term of the new one	years
costs	Closing costs. the total cost of arranging the refinance	currency

Step-by-step calculation

1. Enter the current balance, rate and years remaining
Use the remaining term, not the original one.
2. Enter the new rate, term and closing costs
Compare on the same term to isolate the effect of the rate.

Limitations

Extending the term lowers the monthly payment but can raise total interest even at a lower rate. Read the interest saving, not just the monthly saving.
Assumes both loans are fixed-rate and fully amortising, and that you keep the new loan to term.
Closing costs rolled into the new balance rather than paid in cash are not modelled — enter them as a cash cost.

This page is educational. It applies a standard formula to the figures you enter and shows the arithmetic behind the result. It is an estimate, not an offer, a quotation or financial advice: real costs depend on the provider's pricing, fees and underwriting, and on circumstances this calculator does not collect.

Sources & references

Consumer Financial Protection Bureau — comparing interest rate vs. APR when shopping loan offers — Consumer Financial Protection Bureau (CFPB)

Help & FAQs

Frequently Asked Questions

Clear answers to common questions to help you use this calculator confidently.

When does refinancing make sense?

Tap to view the answer

Refinancing makes sense when the new rate is significantly lower than your current rate AND you plan to stay long enough to recover closing costs.

What is break-even period?

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The break-even period is how many months it takes for monthly savings to exceed closing costs. After that, you start saving money.

How much can I save by refinancing?

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Savings depend on rate difference, loan balance, and term. Enter your details to see exact savings.

What are typical closing costs?

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Closing costs typically range from 2-5% of the loan amount and include appraisal, origination, and title fees.

Should I refinance to a shorter term?

Tap to view the answer

Shorter terms have higher payments but much lower total interest. Consider cash flow vs long-term savings.

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How to Use This Calculator

Enter Current Loan

Input your remaining balance, current interest rate, and years left on the loan.

Enter New Loan Terms

Enter the new interest rate and term you're considering. Include closing costs for accurate break-even analysis.

Analyze the Results

Compare monthly payments, total interest, and the break-even period. If you plan to stay past the break-even point, refinancing saves you money.

Understanding Your Results

Monthly Savings
Current payment minus new payment. Immediate monthly cash flow improvement.
Break-Even
Closing costs ÷ monthly savings. The number of months until savings exceed the cost of refinancing. Stay longer than this to profit.
Net Savings
Total interest savings minus closing costs. The actual amount you save over the full loan term.

Key Tips

✓
Refinancing usually makes sense when rates drop at least 1-2% below your current rate.
✓
If you plan to move or sell within the break-even period, refinancing costs more than it saves.
✓
A shorter new term increases monthly payments but dramatically reduces total interest.
✓
Closing costs typically range from 2-5% of the loan amount. Include all fees for accurate analysis.

When Does Refinancing Make Sense?

The Rate Drop Rule of Thumb

A common guideline is to refinance when rates drop at least 1-2% below your current rate. But the real test is the break-even calculation: divide closing costs by monthly savings. If you'll stay in the home (or keep the loan) longer than the break-even period, refinancing makes financial sense. The calculator shows your exact break-even point.

Closing Costs — The Hidden Factor

Refinancing isn't free. Closing costs typically run 2-5% of the loan amount ($4,000-$10,000 on a $200,000 loan) and include appraisal fees, origination charges, title insurance, and recording fees. Some lenders offer 'no-cost' refinances with a slightly higher rate. The calculator factors closing costs into your break-even and net savings.

Term Choice — Lower Payment vs Lower Total Cost

You can refinance into a shorter or longer term. A shorter term (e.g., 25 years → 15 years) may increase your monthly payment but saves massive amounts of total interest. A longer term lowers monthly payments but increases total interest. The calculator lets you compare any term combination.

Formula & methodology

Formula used

Payment on each loan

PMT = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)

The current and proposed loans are both worked from the same outstanding balance.

Monthly saving

monthly saving = current payment − new payment

The immediate cash-flow improvement.

Break-even

break-even months = ⌈closing costs ÷ monthly saving⌉

How long the lower payment takes to repay the cost of refinancing. Rounded up to a whole month.

Net saving

net saving = interest saved − closing costs

The lifetime gain once the cost of the refinance is subtracted.

Variable definitions

Symbol	Meaning	Unit
balance	Current balance. the amount still owed on the existing loan	currency
rate	Interest rate. the annual rate on the current and the new loan	%
term	Term. years remaining on the current loan, and the term of the new one	years
costs	Closing costs. the total cost of arranging the refinance	currency

Step-by-step calculation

1. Enter the current balance, rate and years remaining
Use the remaining term, not the original one.
2. Enter the new rate, term and closing costs
Compare on the same term to isolate the effect of the rate.

Limitations

Extending the term lowers the monthly payment but can raise total interest even at a lower rate. Read the interest saving, not just the monthly saving.
Assumes both loans are fixed-rate and fully amortising, and that you keep the new loan to term.
Closing costs rolled into the new balance rather than paid in cash are not modelled — enter them as a cash cost.

Calculator inputs

Current Loan

New Loan

Your results

Sources & methodology

Formula & methodology

Formula used

Payment on each loan

Monthly saving

Break-even

Net saving

Variable definitions

Step-by-step calculation

Limitations

Sources & references

When does refinancing make sense?

What is break-even period?

How much can I save by refinancing?

What are typical closing costs?

Should I refinance to a shorter term?

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Calculator inputs

Current Loan

New Loan

Your results

Sources & methodology

How to Use This Calculator

Example: $200,000 from 6.5% to 5%

Understanding Your Results

Key Tips

When Does Refinancing Make Sense?

The Rate Drop Rule of Thumb

Closing Costs — The Hidden Factor

Term Choice — Lower Payment vs Lower Total Cost

Formula & methodology

Formula used

Payment on each loan

Monthly saving

Break-even

Net saving

Variable definitions

Step-by-step calculation

Limitations

Sources & references

How to Use This Calculator

Example: $200,000 from 6.5% to 5%

Understanding Your Results

Key Tips

When Does Refinancing Make Sense?

The Rate Drop Rule of Thumb

Closing Costs — The Hidden Factor

Term Choice — Lower Payment vs Lower Total Cost