Refinance Savings Calculator
Refinancing replaces one loan with another, usually at a lower rate. The monthly saving is the obvious gain, but closing costs and a possibly longer term mean the break-even point and the lifetime interest matter just as much.
Monthly saving
$278.60
- Current payment
- $1,798.65
- New payment
- $1,520.06
- Break-even in months
- 17.9472
- Saving over the new term
- $95,294.43
Values update as you type. This calculator covers the single scenario its formula assumes — see Common Mistakes for what it leaves out.
The formula this calculator uses
Saving = old payment - new payment; Break-even = costs / monthly saving
- balance
- Outstanding principal being refinanced
- oldRate
- Current interest rate
- newRate
- Rate on the new loan
- costs
- Closing costs paid at refinancing
- breakEven
- Months for savings to cover the costs
How to check the result by hand
- 1
Find the current payment
Use the outstanding balance, the current rate and the months remaining on the existing loan.
- 2
Find the new payment
Use the same balance at the new rate over the new term. Both use the same annuity formula.
- 3
Subtract for the monthly saving
Old payment minus new payment is the amount saved each month before any change in tax treatment.
- 4
Add up the closing costs
Include origination, appraisal, title and recording fees. Total them, whether you pay them upfront or roll them into the loan.
- 5
Divide for the break-even
Closing costs divided by the monthly saving gives the number of months to break even. If that is longer than you plan to stay, refinancing likely loses money.
For worked examples, common mistakes and the limits of this formula, read the full How To Calculate Refinance Savings page.