GlenCalc

Refinance calculator

Enter your current loan and the new offer. You get the new payment, how much you save each month, how long until the savings pay back the closing costs, and the total interest either way.

Your answer

Monthly savings$302.97$2,150.12 → $1,847.15
Break-even20 months
Current payment$2,150.12
New payment$1,847.15
Interest left on current loan$409,538.57
Interest on new loan$364,974.58
Lifetime change (interest + costs)Negative means you save-$38,564.00
  • The new loan runs longer than what is left on the current one, so a lower payment can still cost more interest overall.

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How we worked it out

Updated as you change the numbers.

  1. Current payment: $300,000.00 over 330 months at 7.5% = $2,150.12.
  2. New payment: $300,000.00 over 360 months at 6.25% = $1,847.15.
  3. Break-even = $6,000.00 closing costs ÷ $302.97 a month = 19.8 months.

Method and assumptions

Both payments use the fixed-rate amortization formula. The break-even point is the closing costs divided by the monthly saving: if you expect to keep the loan longer than that, refinancing pays off on a payment basis. Lifetime interest shows whether the new loan costs more overall, which often happens when the term restarts.

Questions

When does refinancing make sense?

When you will keep the loan past the break-even point and the lifetime cost is lower, or when you need a lower payment and accept a longer term.

Sources

Method and figures checked on . Every worked answer on this page is covered by an automated test. Found a mistake? Tell us.

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