Reference formulas and worked examples below keep their stated units. Monetary examples use USD; dimensional examples use US customary units unless labeled otherwise. Metric calculator inputs are converted to these reference units before calculation. Choosing another currency does not convert example amounts or exchange money.
How to use this mortgage refinance calculator
Enter the remaining original loan and proposed replacement. Costs are compared over the same modeled period; property expenses continue after a loan is repaid.
How the calculation works
Recalculate the current remaining loan from today’s balance, remaining monthly term, and current interest rate. Model the new loan using the same balance plus any financed fees. Cash-paid fees are counted at month 0.
For principal P, monthly rate r, and n payments, scheduled payment = P × r ÷ [1 − (1 + r)^(−n)]. At a zero rate, use P ÷ n. Monthly interest is rounded to cents; the final payment clears the remainder.
Full-term savings = remaining original payments − new-loan payments − cash fees. A smaller monthly payment alone does not establish savings.
At holding month h, compare cumulative cash already paid + remaining loan balance for each option. The new side includes cash fees, and financed fees are already in its principal. This treats the remaining balance as an obligation rather than free savings.
Lasting cost break-even is the earliest month when this cash-plus-debt comparison is nonnegative and stays nonnegative through both scheduled payoffs. An early advantage that later disappears is not reported as lasting break-even. Time value of money is not modeled.
Mortgage-insurance costs accrue only while the relevant modeled loan has payments. Tax, property insurance and HOA estimates accrue through the same comparison endpoint for both options, including months after either loan is repaid.
The full comparison endpoint is the latest of the two loan terms and your selected holding period. The holding-period result uses your chosen month. Break-even must remain nonnegative through the full modeled comparison.
Worked example
If two 0% loans repay the same $12,000 over 12 and 24 months, the new payment is lower but a $120 refinance fee adds cost. Identical $100 monthly property costs continue for both options through the shared 24-month comparison, even after the old loan is paid off.
Limits and assumptions
Fixed monthly amortization from the entered balance, rate and term. No cash-out, changing interest rates, tax deductions, missed payments, time-value discounting or national mortgage conventions. PMI is constant until payoff; automatic equity-based cancellation is not modeled. Enter incremental refinancing fees, avoiding double-counting prepaid expenses already included elsewhere.
Frequently asked questions
Why compare the remaining debt as well as payments?
A longer loan can reduce cash payments by delaying principal repayment. The holding-period result includes remaining balances so delayed principal is not called a saving.
Do property taxes stop when a loan is repaid?
No. Entered property costs continue for both options over the common comparison period. Only mortgage-insurance costs stop with the modeled loan.
Does PMI automatically cancel at a particular equity level?
No. The entered amount stays constant until loan payoff. Use a scenario appropriate to your comparison and account for other cancellation policies separately.
Is a lower payment always cheaper?
No. Check the total cost, chosen holding month and lasting break-even alongside the monthly payment.