ClarityHow to use this tool
- Enter current outstanding balance, current annual interest rate, remaining months, new annual interest rate, new term in months, upfront refinancing costs.
- Select Calculate to view the result.
- Check the method and assumptions below before using the result.
The method, explained
Compute both amortizing monthly payments on the same balance. Monthly saving = old payment − new payment. Simple cash-flow break-even = upfront costs / positive monthly saving. Compare total remaining payments, including new costs, separately.
Using current outstanding balance = 200000 money, current annual interest rate = 7 %, remaining months = 240, new annual interest rate = 5 %, new term in months = 240, upfront refinancing costs = 4000 money, the result is 230.686393 currency. Change these example inputs to match your task; use the method above to check each step.
What to keep in mind
No cash-out or financed closing costs. The simple break-even ignores differing balances, tax effects and opportunity cost. It is not an economic recommendation. A scenario calculation using your inputs, before unlisted fees or taxes. It is not a quoted product rate or personalized recommendation.
Common questions
Which inputs does this calculation need?
Compare an existing loan with a new rate and term, including upfront refinancing costs. Enter current outstanding balance in money, current annual interest rate in %, remaining months, new annual interest rate in %, new term in months, upfront refinancing costs in money. The filled example is editable and is not a saved personal record.
How should I interpret the result?
No cash-out or financed closing costs. The simple break-even ignores differing balances, tax effects and opportunity cost. It is not an economic recommendation. A scenario calculation using your inputs, before unlisted fees or taxes. It is not a quoted product rate or personalized recommendation.
Methodology maintained by ClarityKit. How these tools are built and checked.