Z

Refinance Calculator

Compare your current loan with a refinance to see monthly and lifetime savings.

Runs in your browser — files never leave your device

Current payment
$1,688.02
New payment
$1,461.48
Monthly saving
$226.54
Total interest saved
$67,962.84

How it works

The calculator prices your existing loan and the proposed refinance side by side. It computes the standard amortizing payment on the current balance at your current rate, then again at the new rate, both over the same remaining term, and reports the monthly difference plus the difference in total interest over the life of the loan. Holding the term constant isolates exactly what the rate change is worth.

Both payments use the amortization formula: payment = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the balance, r the monthly rate (annual ÷ 12) and n the remaining months. Total interest is simply payment × n − P.

A worked example with the defaults: a $250,000 balance with 25 years (300 months) remaining costs $1,688.02 a month at 6.5%, with $256,405.37 of interest left to pay. Refinanced at 5% over the same 300 months, the payment drops to $1,461.48 and the remaining interest to $188,442.53. That is a monthly saving of $226.54 and a lifetime interest saving of $67,962.84.

The missing ingredient is closing costs, typically around 2–6% of the loan amount (as of 2025). Divide them by the monthly saving to get your break-even point: $5,000 of fees ÷ $226.54 ≈ 22 months, so this refinance only pays if you keep the loan longer than that. Watch two other traps: rolling the fees into the new balance quietly shrinks the saving, and resetting to a brand-new 30-year term instead of your remaining 25 lowers the payment further but stretches interest over five extra years.

Estimates only — actual refinance pricing depends on credit, home equity and the rate you lock, and fees vary by lender and state.

Frequently asked questions

Does this include closing costs?
No — the results are pure payment and interest comparisons. Refinance closing costs commonly run around 2–6% of the loan amount (as of 2025), covering origination, appraisal and title fees. Weigh them against the savings shown: at the defaults, $5,000 of costs ÷ $226.54 of monthly saving is a break-even of about 22 months.
What is a break-even point and why does it matter?
It is how long you must keep the new loan before the accumulated monthly savings repay the refinance fees. If you expect to sell or refinance again before that month arrives, the deal loses money even though the payment is lower. Past break-even, every additional month is genuine saving.
Why does the calculator keep the same remaining term?
To make an apples-to-apples comparison: both payments are computed over the same remaining months, so the entire difference comes from the rate. If you instead reset a 25-year balance into a fresh 30-year loan, the payment falls further but you pay interest for five extra years, which can erase the savings. Match the new loan’s term to your remaining term when you can.
How big a rate drop makes refinancing worthwhile?
The old rule of thumb says 0.5–1 percentage point, but the real test is whether lifetime savings beat the costs within the time you will keep the loan. Large balances make small rate drops worthwhile, while small balances or a short stay need bigger drops. Run your actual numbers instead of relying on the rule.
Is the total-interest-saved figure realistic?
It assumes both loans run to full term with no extra payments, no sale and no future refinance. If you prepay or move, the realized saving will be smaller than shown. Treat the monthly saving as firm and the lifetime figure as a best case.
Can I use this for auto or personal loans?
Yes. The math is the standard amortizing-loan payment formula, so any fixed-rate loan — auto, personal or student — compares the same way. Enter the balance, both rates and the remaining term in months converted to years.
Is my loan data uploaded?
No — everything is calculated in your browser and never sent to a server.

Related tools