Loan refinance calculator: compare more than the payment
Compare the remaining loan with a replacement loan on the same usable amount and a shared time horizon. A lower monthly payment is only one part of the refinancing calculation.
Model checked: 9 November 2026 · Best Finance Calc
Open the free calculatorRelated editable workbook
Set a like-for-like starting point
Use the outstanding amount you would need to settle or replace, not the loan's original historical amount. Enter the remaining rate and term for option A, then the proposed rate, term and fees for option B. Use the same payment frequency. Separate upfront fees, deducted fees, financed fees and recurring insurance. A rate quote alone does not describe the cost of either option.
Worked example: a lower payment can leave more debt
Start with US$20,000 at 12% nominal annual interest and 36 monthly payments remaining. Compare a replacement loan for the same usable US$20,000 at 10% nominal annual interest over 48 months, with a US$500 upfront fee. The payments are approximately US$664.29 and US$507.25. At payment 24, the modeled remaining balances are US$7,476.59 and US$10,992.58. Including payments made, upfront fees and that remaining debt, the borrowing costs at this horizon are US$3,419.46 and US$3,666.62. The smaller payment is not the cheaper option at this particular checkpoint.
Include the balance at your comparison date
The comparison engine uses: payments made through the horizon + upfront fees + principal still outstanding − usable cash received. Including the unpaid balance avoids comparing a nearly repaid loan with a longer loan as if both ended at the checkpoint. The figures are modeled forward costs from the common starting point, not a jurisdiction-specific APR or a tax-adjusted return.
Use scenarios rather than a single break-even claim
Try the date you expect to settle, sell or refinance again, then try a longer horizon. Model financed closing costs where appropriate. A simple upfront-fee divided by monthly-saving calculation ignores differences in balance and can mislead when terms differ. This workbench shows horizon costs; it does not claim an automatic lender-specific break-even date.
Confirm what is excluded
Add relevant settlement charges manually and check how your lender treats fees, daily interest and early repayment. Historical interest already paid is not a future saving. Currency selection changes display units and does not convert money. The calculator estimates the inputs you provide and cannot decide whether refinancing fits your personal circumstances.
Questions about this model
Should I compare the original term or the remaining term?
For a forward refinancing study, use the current balance and remaining payments. Historical costs already paid do not belong in the new forecast.
Does a lower quoted rate guarantee a saving?
No. Fees, insurance, the replacement term and the balance left at your chosen date also matter.
Model and reference material
Educational estimates, not a credit offer or personal financial advice. The examples use stated assumptions and the site’s documented engine.