Refinance Calculator

Current Loan

Current Loan Amount

Loan term

Interest Rate

Remaining Term

New Loan

New Loan Term

Interest Rate

Points

Cash Out and Cost

Cash Out Amount

Costs

Results

1 What is Refinance Calculator ?
2 How to Use This Calculator
3 Formula Used
4 Variables Explained
5 Worked Example
6 Why Use This Calculator?
7 Common Mistakes
8 Frequently Asked Questions
9 Sources & References
10 Related Calculators

What is Refinance Calculator ?

The refinance calculator compares the remaining schedule of a fixed-rate loan with a proposed replacement loan. It estimates the old balance from the original principal, rate, term and time left. It then adds the selected cash out, points and closing costs to form a new principal and calculates both payment schedules.

This side-by-side view is useful when a rate quote looks attractive but changes the payoff date or finances substantial costs. It is a planning estimate rather than a lender disclosure. Use it to ask better questions, then compare the actual Loan Estimate, payoff statement and Closing Disclosure.

How to Use This Calculator

Copy the original amount, term and annual rate from reliable loan records.
Enter whole years and additional months remaining. Months must be from 0 through 11.
Enter the proposed loan’s years, additional months and annual rate.
Add the quoted points percentage, requested cash out and closing costs.
Calculate, then read payment savings alongside remaining interest, new interest, total-payment difference and break-even.

Both loan durations must be valid. The old remaining duration cannot exceed the original schedule, and the new duration must total at least one month.

Formula Used

Monthly rate is the annual percentage divided by 100 and then by 12. With principal P, monthly rate r and n payments, M = P × r(1 + r)ⁿ ÷ [(1 + r)ⁿ − 1]. If r is zero, M = P ÷ n.

The calculator amortizes the original schedule to estimate its remaining balance. Replacement principal = old balance + cash out + closing costs + old balance × points percentage. Total interest equals scheduled payments minus principal. Break-even uses upfront points plus closing costs divided by positive monthly savings.

Variables Explained

Field	Meaning on this page
Current loan amount	The loan’s original principal, despite the field’s short label.
Loan term	Original repayment period in years.
Interest rate	Original annual nominal rate used for monthly amortization.
Remaining term	Years and extra months still scheduled.
New loan term	Proposed years and extra months, combined into a payment count.
New interest rate	Proposed annual nominal percentage.
Points and costs	Charges added to new principal under this calculator’s assumptions.
Cash out	Additional borrowed amount; a negative figure reduces principal.

Worked Example

Start with a $300,000, 30-year loan at 6% and 25 years remaining. Test a 20-year replacement at 5.5%, with 0.5 points, $10,000 cash out and $4,000 closing costs. The old scheduled payment is about $1,798.65.

After the implied first five years, the estimated balance is about $279,163.07. Half a point is $1,395.82. The proposed principal therefore becomes about $294,558.89 after adding points, cash out and costs. At 5.5% for 240 months, the new principal-and-interest payment is about $2,026.23.

The proposed payment is higher because the balance rises and repayment ends five years earlier. This scenario has no payment-savings break-even, but the output’s interest and total-payment comparisons give more context than the payment alone.

Why Use This Calculator?

Read “remaining total payment” as the old scheduled payment multiplied by remaining months. Read “new total payment” the same way for the proposal. Their difference compares scheduled principal and interest from today onward under the calculator’s assumptions; it does not include escrow or unentered charges.

A displayed break-even is a simple recovery estimate for points and closing costs when the new monthly payment is lower. Financing costs can also generate interest, and moving, selling, paying early or refinancing again changes the realized outcome. Test the shortest, longest and most likely holding periods rather than relying on one lifetime projection.

“Take-home cash” subtracts points and closing costs from cash out. That is an informational net under this model, not the actual cash-to-close figure. Settlement credits, prepaid interest, escrow funding and payoff adjustments can change cash flows. The official documents control.

Common Mistakes

Using the present balance in a field the calculation treats as original principal.
Entering a decimal rate such as 0.055 when the intended input is 5.5%.
Calling a payment reduction savings without checking the longer payment count.
Counting escrow in the old payment while the calculated new payment excludes it.
Assuming every point has the same effect on a quoted rate.
Ignoring a gap between the estimated balance and the servicer’s payoff amount.
Reading take-home cash as a guaranteed settlement figure.

Frequently Asked Questions

Why does the calculator ask for the original principal?

It reconstructs the payment and current balance from the original amortization schedule. Check that estimate against an up-to-date payoff statement.

What does one point mean?

One point generally equals one percent of the relevant loan amount. This page calculates points as a percentage of its estimated remaining balance.

Why is the new payment higher after the rate falls?

A shorter term, financed costs or added cash out can outweigh the rate reduction and raise the required monthly amount.

What does never no savings mean?

The proposed payment is not lower, so upfront costs cannot be recovered through monthly payment savings under the simple break-even method.

Are closing costs paid in cash in this estimate?

They are added to the proposed principal. Actual offers may require cash, finance some fees or apply lender credits, so use the quoted structure.

Can I compare adjustable-rate loans here?

The arithmetic assumes each entered rate stays fixed for its full schedule. It does not model future rate adjustments or caps.

Which result matters most?

No single output answers every decision. Compare payment affordability, costs over the expected holding period, payoff timing and risks in the actual offer.