Refinance Calculator
Calculate your monthly payment savings and break-even point when refinancing a loan to a new rate or term.
Calculator Inputs
Sets the currency this calculator's numbers are denominated in. This is presentation only — it does NOT convert your numbers between currencies, it only changes how they're formatted.
The current outstanding balance on the loan you're refinancing.
The annual interest rate on your current loan.
Years (and months) remaining on the current loan.
Additional months (0-11). For 18 months, enter 1 year 6 months.
The annual interest rate on the proposed new loan.
Total upfront fees to refinance (appraisal, origination, title, etc.).
- Monthly Payment Savings
- $219.42
- Break-Even (Months)
- 18.23
- Current Monthly Payment
- $1,638.89
- New Monthly Payment
- $1,419.47
- Status
About these results
CalcSpectrum calculators produce automated estimates using established formulas and the specific values you enter. Because real-world outcomes depend on input accuracy, mathematical assumptions, and rounding conventions, please verify critical figures with an appropriately qualified financial, tax, medical, legal, or other professional, as relevant.
Financial Notice: These figures are informational estimates for personal planning only. They do not constitute financial, investment, tax, or legal advice, nor do they represent a lending offer or credit approval. Provider and financial institution figures, rates, fees, and underwriting requirements may differ.
How It's Calculated
Formula
This calculator compares your current loan's monthly payment against a proposed new rate and term, both computed with the standard fixed-rate amortized-payment formula. The refinanced loan amount is assumed to equal your existing balance — no cash-out and no rolled-in closing costs. The monthly savings is simply the difference between the two payments. The break-even point (in months) is how long it takes for those monthly savings to cover the upfront closing costs — after that point, refinancing has paid for itself. If the new payment isn't actually lower, there's no meaningful break-even point, and that's reported explicitly rather than as a negative or infinite number.
Worked Examples
$250,000 balance: 6.5% (27 years left) → 5.5% (new 30-year term), $4,000 closing costs
- Current payment at 6.5% over 27 years: ≈ $1,638.89/month
- New payment at 5.5% over 30 years: ≈ $1,419.47/month
- Monthly savings: 1,638.89 − 1,419.47 ≈ $219.41
- Break-even: 4,000 / 219.41 ≈ 18.2 months (just over a year and a half)
Refinancing to a HIGHER rate: 5% (27 years left) → 7% (new 30-year term)
- The new payment comes out higher than the current one, so monthly savings is zero or negative
- There's no break-even point in this case — refinancing wouldn't lower the payment at all
Frequently Asked Questions
Does this assume cash-out refinancing?
No. This calculator assumes a straight rate-and-term refinance: the new loan amount equals your existing balance, with no additional cash withdrawn and no closing costs rolled into the new loan balance.
What if my break-even period is longer than I plan to stay in the loan?
If you expect to pay off or sell before reaching the break-even month count, the upfront closing costs may not be worth paying for the eventual monthly savings — that's exactly the comparison this calculator is meant to support, though the actual decision depends on your specific plans.
Why is there no break-even shown for some inputs?
If the new proposed loan's payment isn't lower than your current payment (because the new rate/term combination doesn't produce enough savings), there's nothing for the closing costs to break even against — refinancing under those terms doesn't reduce your monthly payment at all.
Does this include closing costs financed into the new loan, or extending the term to lower payments?
Extending the term is already part of the comparison — you can enter a longer new term to see its effect. Financing (rolling) closing costs into the new loan balance instead of paying them upfront is not modeled; this calculator treats closing costs as a separate, one-time out-of-pocket cost compared against monthly savings.