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Refinance

Refinance Calculator — Old Loan vs New Loan

Compare your current loan payment against a new refinanced loan, see the monthly savings (or extra cost), and find out how many months it takes to recover your closing costs.

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CURRENT LOAN
NEW REFINANCED LOAN

💵 Refinance Comparison

Enter your loan details to compare
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Disclaimer: Results provided by this calculator are for educational and estimation purposes only. They do not constitute formal financial, investment, or tax advice. Actual returns, rates, and tax treatment depend on your specific circumstances and prevailing regulations. Consult a certified financial advisor or chartered accountant before making financial decisions.

How the Refinance Comparison Works

Refinancing replaces your existing loan with a new one, usually to capture a lower interest rate, change the term, or both. This tool computes your current monthly payment from your remaining balance, current rate, and remaining term, then computes a new monthly payment using that same balance as the new loan's principal, applied to the new rate and new term. The formula behind both figures is the standard installment loan payment: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the principal, r is the monthly interest rate, and n is the number of monthly payments.

The difference between the two payments is your monthly savings. If you entered closing costs for the new loan, the calculator divides those costs by your monthly savings to estimate a break-even period — the number of months before the savings outweigh what you paid to refinance.

Why the Break-Even Number Matters More Than the Rate

A lower rate sounds like an automatic win, but if you plan to sell the property or pay off the loan before you hit break-even, the refinance can cost you money overall despite the lower rate. Always weigh the break-even period against how long you actually intend to keep the loan, not just against the headline rate difference.

Frequently Asked Questions

There's no universal cutoff, but a break-even period well under half of how long you plan to keep the loan is generally considered worthwhile. If closing costs take 4 years to recover and you expect to sell or repay the loan within 3, the refinance likely isn't paying for itself — run the numbers against your realistic timeline, not just the lowest advertised rate.
Yes, and it's easy to overlook. Restarting a loan at a new, often longer, term can lower your monthly payment while still increasing total interest paid over the life of the loan, because you're stretching payments across more months even at a lower rate. Compare the full-term interest cost, not just the monthly figure, before deciding.
It depends almost entirely on your remaining balance and how long you'll hold the loan. On a large balance with many years left, even a small rate cut can produce meaningful monthly savings that clear closing costs quickly. On a smaller balance or a loan you'll pay off soon, the same rate cut may barely move the needle — always check the calculated break-even period rather than judging by the rate difference alone.
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