The refinance calculator can help plan the refinancing of a loan given various situations, and also allows the side-by-side comparison of the existing or refinanced loan.
• Input your current remaining loan balance, current payment, and interest rate in the Current Loan panel.
• Configure the new term, interest rate, discount points, closing fees, and optional cash-out equity in the New Loan panel.
• Review the side-by-side payment variance, lifetime interest reduction, break-even period, and trajectory chart.
Break-even period: 729 months (~60.8 years to recoup closing costs)
| Metric | Current Loan | Refinanced Loan | Difference / Impact |
|---|---|---|---|
| Monthly Payment | $1,800.00 | $1,791.08 | -$8.92 / mo |
| Interest Rate | 7.00% | 6.00% | -1.00% |
| Total Loan Term / Remaining | 23 yrs, 10 mos | 20 yrs, 0 mos | 46 months shorter |
| Total Interest Paid | $264,249.19 | $179,858.64 | -$84,390.55 |
| Upfront Closing Costs & Points | $0.00 | $6,500.00 | +$6,500.00 |
| Net Overall Savings | — | — | Save $77,890.55 |
Refinancing involves replacing an existing debt obligation with a new loan under updated terms, interest rates, or borrowing structures. Borrowers commonly refinance mortgages, auto loans, and student debt to lower monthly payments, reduce total interest, or unlock accumulated equity.
The most common strategy: lowering your annual percentage rate (e.g., from 7.0% down to 6.0%) or adjusting duration (e.g., 30-year to 15-year) to accelerate equity building.
Always ensure you plan to stay in the home longer than the break-even period ($ClosingCosts / \Delta PMT$). If fees are $6,000 and you save $200/month, you break even in 30 months.
Borrowing a larger principal than your remaining balance to extract cash for home improvements, high-interest debt consolidation, or major investments.
Calculate monthly home mortgage installments, taxes, and PMI.
Calculate interest savings and early payoff with extra principal payments.
Calculate true Annual Percentage Rate including points and closing fees.
Determine how much home you can afford based on income and DTI ratios.