Calculate savings from refinancing your loan. Free online refinance calculator with formula, examples, and FAQ for refinancing decisions.
Refinancing replaces your current loan with a new one at a lower interest rate, potentially saving you thousands in interest and reducing your monthly payments. However, refinancing involves closing costs and fees. This calculator helps you determine whether refinancing makes financial sense by comparing your current loan with the new offer, factoring in closing costs and the break-even period.
Monthly Savings = Current EMI - New EMI | Break-Even = Closing Costs / Monthly Savings | Total Saved = Current Total Interest - (New Total Interest + Closing Costs)Monthly savings is the difference between your current and new EMI. The break-even period tells you how many months it takes to recover the closing costs through monthly savings. Total interest saved accounts for the difference in total interest paid over the life of both loans, minus the closing costs. If you plan to stay in the loan past the break-even, refinancing saves money.
| Input | Output |
|---|---|
| Balance: $200,000, Current: 8%, New: 6%, Remaining: 20 years, New term: 20 years, Costs: $3,000 | Monthly Savings: $264, Break-even: 12 months, Total Saved: $57,000+ |
| Balance: $150,000, Current: 7%, New: 5.5%, Remaining: 25 years, New term: 25 years, Costs: $2,500 | Monthly Savings: $135, Break-even: 19 months, Total Saved: $38,000+ |
| Balance: $100,000, Current: 6%, New: 5.5%, Remaining: 15 years, New term: 15 years, Costs: $4,000 | Monthly Savings: $29, Break-even: 138 months, Total Saved: ~$5,200 |