How the refinance calculator works
We compute the monthly payment on your remaining balance two ways: once at your current rate and remaining term, and once at the new rate and term you're considering. The difference is your monthly savings. We also compare the total interest each path would cost so you can see the lifetime impact, not just the monthly change.
M = P · [ i(1+i)ⁿ ] / [ (1+i)ⁿ − 1 ] (computed for both loans)
P = remaining balance · i = monthly rate (APR ÷ 12) · n = months
Don't forget closing costs
Refinancing usually has closing costs (often 2–5% of the balance). Divide those costs by your monthly savings to find your break-even point: the number of months it takes the lower payment to pay back the cost of refinancing. If you'll keep the loan past that point, refinancing typically makes sense.
Frequently asked questions
Is refinancing worth it?
Usually when the monthly savings recover the closing costs within the time you plan to keep the loan (the break-even point), and the new rate is meaningfully lower than your current one.
Does a longer new term really save money?
A longer term lowers the monthly payment but can raise total interest. Always check both the monthly figure and the lifetime interest figure above before deciding.
Will I save more by keeping the same term?
Often, yes. Refinancing into a shorter or equal term at a lower rate maximizes interest savings. Try entering a new term close to your years remaining to compare.
Does this work for any loan?
Yes. It works for mortgages, auto loans, and student loans, anywhere you're replacing an existing balance with a new fixed-rate loan.
Estimates only, not financial advice. Closing costs not included. Confirm with your lender.