Refinance calculator

How to use this calculator

1. Choose what you know about your current loan: “I know my remaining term” (how many years are left), or “I know my monthly payment” (your principal-and-interest payment).
2. Enter your current remaining balance (how much you still owe).
3. Enter your current annual interest rate (use the loan note rate; APR also includes certain fees).
4. If you picked remaining term, enter how many years you have left. If you picked monthly payment, enter your current monthly payment for principal and interest only (not taxes or insurance).
5. Enter the new annual interest rate you are considering, and choose the new loan term.
6. If you want to include refinance costs, open Advanced options:
   • Closing costs and lender fees (upfront costs to get the new loan).
   • Points (an upfront fee, usually 1 point = 1% of the loan amount).
   • Cash-out amount (extra money you take out, which increases the new loan).
   • Roll fees and points into the new loan (means you finance the costs instead of paying them upfront).
   • Pay the same monthly amount (models sending any monthly savings to principal).
7. Press Calculate. Check: the new payment, the monthly change, the break-even time, and the chart.

This calculator compares principal and interest payments. It does not include property tax, homeowners insurance, HOA, or other monthly bills. Real refinance offers can include other fees and rules.

• It compares your current fixed-rate loan payment (principal and interest) against a new refinance payment (principal and interest).
• It estimates break-even as the first month after closing where total principal-and-interest cash out for the refinance becomes strictly lower than keeping the current loan, after including any upfront costs you chose to pay at closing.
• It can also show a “pay the same monthly amount” scenario: if the refinance payment is lower, it treats the difference as an extra principal payment each month.

These are standard fixed-rate amortisation relationships.

• Monthly rate: r = (annual interest rate / 100) / 12.
• Payment from balance P and term n months (r > 0): payment = P * r * (1 + r)^n / ((1 + r)^n – 1). If r = 0, payment = P / n.
• If you choose “I know my monthly payment”, the calculator back-solves an estimated remaining term: n = -ln(1 – (P * r) / payment) / ln(1 + r). If payment is not greater than P * r, the loan does not pay down under this model.

• Interest for a month is balance * r.
• Principal for a month is payment – interest (floored at 0 in edge cases).
• New balance is reduced by principal (and any extra principal, when modelling the “same payment” scenario).
• The simulation stops when the balance reaches 0 or the term limit is hit.

• Base new loan amount = current balance + cash-out (if any).
• Points cost = base new loan amount * (points / 100).
• If you roll costs into the loan: fees and points are added to the new loan amount, and upfront costs are treated as $0 in the break-even calculation.
• If you do not roll costs into the loan: fees and points are treated as an upfront cost at month 0 for break-even.

• It builds two cumulative series (month 0 to a capped horizon) for principal-and-interest cash out: keep current loan vs refinance.
• Upfront costs are added to the refinance series at month 0 only when you chose to pay them upfront.
• Break-even month is the first month where refinance cumulative cost is less than or equal to current cumulative cost.
• The chart and break-even search are capped to 360 months (30 years) and shown at 12-month intervals plus the last point. Actual final payments are included. This is a cash-payment comparison, not a net-wealth comparison: remaining balances and the money received from cash-out are not deducted. An early payment advantage can reverse later.

• This tool compares principal and interest only. Taxes, insurance, HOA, and other monthly bills are not included.
• It assumes a fixed interest rate and a regular monthly payment schedule. It does not model variable rates, recasts, or prepayment penalties.
• If you enter your current monthly payment, the remaining term is an estimate under this simplified model. If you have been paying extra, or your loan is not a standard fixed-rate schedule, results can differ.
• Break-even here is based on raw cumulative dollars. It does not discount future cash flows (no time value of money).

• Consumer Financial Protection Bureau (CFPB). “Should I refinance?” handout (costs and how long you plan to keep the loan). https://files.consumerfinance.gov/f/documents/cfpb_should_i_refinance_handout.pdf
• CFPB Ask CFPB. “How should I use lender credits and points (discount points)?” (points and credits basics). https://www.consumerfinance.gov/ask-cfpb/how-should-i-use-lender-credits-and-points-also-called-discount-points-en-136/
• CFPB. HELOC brochure (includes a plain-language definition of a cash-out refinance). https://files.consumerfinance.gov/f/documents/cfpb_heloc-brochure.pdf