Calculator Inputs
Example Data Table
| Current Balance | Current Rate | Remaining Term | New Rate | New Term | Net Costs | 5-Year Horizon | Monthly Change | Break-Even |
|---|---|---|---|---|---|---|---|---|
| $240,000.00 | 7.10% | 24 yrs | 5.80% | 20 yrs | $3,900.00 | $11,913.43 | $18.44 | 16 months |
This example is illustrative and uses the same refinance formulas as the calculator.
Formula Used
1) Monthly payment
M = P × r / (1 − (1 + r)−n)
2) Refinance loan amount
New Loan = Current Balance + Cash-Out + Financed Net Closing Costs
3) Interest savings
Interest Savings = Remaining Interest on Current Loan − Interest on Refinance Loan
4) Cumulative savings by month
Savings = (Current Payments + Current Balance) − (New Payments + New Balance + Upfront Costs − Cash-Out)
Variable meanings
P is principal, r is monthly interest rate, and n is total months. Break-even is the first month cumulative savings becomes positive.
How to Use This Calculator
- Enter your remaining balance, current rate, and remaining term.
- Enter the proposed refinance rate and new term.
- Add closing costs, lender credits, and any cash-out amount.
- Choose whether net costs are paid upfront or financed.
- Set your expected stay horizon in months.
- Add optional extra monthly payments for either loan.
- Press Calculate Savings to view results above the form.
- Use the CSV and PDF buttons to export the analysis.
FAQs
1) What does this calculator measure?
It estimates payment changes, total interest impact, break-even timing, balance trends, and cumulative refinance savings across your selected stay horizon.
2) Does a lower payment always mean a better refinance?
No. A longer term can reduce payment while increasing lifetime interest. The calculator checks payment, payoff time, and cumulative savings together.
3) Why can interest savings be negative?
A refinance can cost more overall when the new term resets for many years, closing costs are high, or cash-out increases the new balance.
4) What happens if I finance closing costs?
Financing costs raises the new principal. That may avoid upfront cash, but it can delay break-even and add extra interest over time.
5) Why is the stay horizon important?
Many borrowers sell, move, or refinance again. Horizon savings show whether refinancing helps during the period you actually expect to keep the loan.
6) Can I include extra principal payments?
Yes. You can add optional extra monthly payments for both the current and new loans to compare faster payoff strategies.
7) How does cash-out affect the answer?
Cash-out increases the refinance balance and usually reduces savings. The calculator includes it in the new loan and net position analysis.
8) Why might there be no break-even month?
Break-even may never appear when upfront costs are large, monthly savings are weak, or the refinance creates a worse long-term balance path.