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Loans tools

When could refinancing make up for its costs?

Compare keeping your loan with refinancing, including upfront costs, payments and remaining debt over the same period.

A lower monthly payment can leave more debt unpaid. Break-even here compares payments plus remaining debt and upfront costs, with no return on payment savings.

Refinance break-even calculator inputs

Use the same currency throughout. Enter numbers without commas or currency symbols, for example 1000.50. Amounts allow two decimal places; rates allow six.

Your current loan

Your current remaining loan balance.
Use the loan interest rate, not APR, which can include fees. For 5%, enter 5.
Include repayment and interest; leave out tax, insurance and fees.

Proposed new loan

Use the loan interest rate, not APR, which can include fees. For 5%, enter 5.
Use a whole number from 1 to 600. For 5 years, enter 60.
Paid separately at the start; not added to the loan. Enter 0 for no fees.

How we compare

Use a whole number from 1 to 600. For 5 years, enter 60.

Calculate once. After that, valid edits update your result automatically.

Understand this estimate

A lower monthly payment can leave more debt unpaid. Break-even here compares payments plus remaining debt and upfront costs, with no return on payment savings.

Worked example

Keeping a 1200 interest-free loan with payments of 100 costs no interest. Refinancing for 24 months with 60 upfront costs reduces payments to 50 but never recovers that 60 within a 12-month comparison.

How we calculate this

The loan rate is nominal per year, divided by 12. Interest rounds half-up to a cent each month before the payment.

We find the smallest cent payment that repays within the requested term. The last payment is capped at what is owed; very small loans can finish earlier.

This is a fixed-rate monthly model, not APR or a lender quote. Taxes, insurance, variable rates, daily interest, penalties and financed fees are excluded.

For each month, compare upfront costs + payments made + remaining debt − initial debt. Break-even is the earliest month when refinancing is no more costly and stays so through the chosen horizon. Equality can begin at month zero.

This is a horizon-specific comparison without discounting or investing payment savings. Existing-payment loans that cannot repay within 600 months are unsupported.

Sources explain the underlying concepts; this calculator uses the conventions described above. It does not recommend a financial product.

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