Mortgage Refinance Calculator

Lenders make refinancing sound simple, "just switch and save." The reality is more nuanced, and a calculator prevents three common mistakes.

Mistake 1: Ignoring closing costs. A 1.5% rate reduction sounds significant, but if closing costs are $6,000 and monthly savings are only $180, it takes 33 months to break even. Many borrowers refinance, sell two years later, and end up worse off than if they had stayed put.

Mistake 2: Focusing only on the monthly payment. Extending a 15-year remaining mortgage into a new 30-year term can drop the monthly payment by 25–30%, but total interest paid over the life of the loan often increases even at a lower rate. The Interest Saved row in the comparison will show a negative number in this scenario, an immediate red flag.

Mistake 3: Underestimating closing costs. US refinancing typically costs 2–5% of the loan amount. Indian balance transfers carry processing fees (0.25–1%), legal charges, and foreclosure penalties on fixed-rate loans. Entering accurate closing costs is critical. Model both an optimistic and a conservative estimate to find your safe break-even range.

Once you have a refinance offer in hand, use this calculator alongside our APR Calculator to translate the nominal rate into a true annual cost that includes fees, enabling a like-for-like comparison of competing offers.

Homeowners who took loans at peak interest rates and are now seeing lower market rates. If your home loan rate is 150–200 basis points above current new-loan rates, the interest savings from a balance transfer are likely to comfortably exceed the switching costs, but this calculator will quantify that precisely.

NRIs with mortgages in multiple currencies. Managing a USD mortgage in the US and an INR home loan in India involves different rate environments. The multi-currency support lets you model both in the same tool.

Borrowers mid-tenure who want to shorten their remaining term. If your income has grown and you want to restructure from 25 remaining years to 15, refinancing at the current rate for a shorter term costs more monthly but dramatically cuts total interest. This is a much better outcome than simply making extra prepayments on the original loan.

Anyone who received a refinance solicitation from a bank. Lenders contact borrowers with attractive rate quotes that may obscure the net benefit after fees. Entering the solicitation's rate and terms here immediately tells you whether it is genuinely advantageous.

Property investors comparing refinance with alternative uses of capital. The Net Savings figure quantifies the value of refinancing in absolute terms. If you could deploy the same closing cost capital elsewhere at a higher return, staying on the current loan may be preferable. For a broader view of home ownership cost, see our Rent vs Buy Calculator.

Monthly Savings (highlighted) is the reduction in your monthly principal-and-interest payment after refinancing. A positive number means your cash flow improves every month from day one. A negative number means the new rate is actually higher, and the result card turns red with a warning.

Break-Even Period is the number of months until cumulative monthly savings recover your closing costs. This is the single most important number for anyone who is not certain about their long-term hold period. A break-even under 24 months is generally considered excellent; 24–48 months is reasonable for a long-term owner; beyond 48 months warrants careful thought about whether you will stay long enough.

Current Remaining Interest is the total interest you will pay on your existing loan if you make no changes, calculated over the years remaining on your current loan.

New Total Interest is the total interest you will pay under the refinanced loan over its full new term. Compare these two numbers carefully: if the new term is longer than what you have remaining, New Total Interest can exceed Current Remaining Interest even at a lower rate.

Interest Saved is the difference between current remaining interest and new total interest. When positive, this is real money kept in your pocket. When negative, the warning flag on the results card, it means the term extension has reversed any rate benefit.

Net Savings subtracts your closing costs from Interest Saved. This is the true lifetime financial benefit of refinancing, the number that answers "is this worth doing?"

New Monthly P&I vs Current Monthly P&I shows the before-and-after side by side in the comparison table, alongside the payoff dates, so you can see exactly when you would have been debt-free under each scenario.

1. Select your Currency, choose from USD, INR, EUR, GBP, CAD, or AUD. Switching currency resets the default balance and closing costs to realistic figures for that market.

2. Enter Remaining Loan Balance, the current outstanding principal on your home loan (not the original loan amount). Check your latest bank statement or loan account for this figure. In India, this appears on your annual amortisation statement from your bank.

3. Set Current Interest Rate, the annual rate you are currently paying. For Indian floating-rate loans, this is the rate as per your last interest rate revision notice, typically expressed as "EBLR + X%" or a fixed spread.

4. Adjust Years Remaining, the number of years left on your current loan. If you originally took a 20-year loan 5 years ago, enter 15.

5. Enter New Interest Rate, the rate being offered by the new lender. Compare multiple offers by changing this number: even a 0.25% difference in rate creates meaningful savings on large loan balances over long terms.

6. Choose New Loan Term, click one of the 10/15/20/25/30-year tabs. Matching your current remaining years (e.g. staying at 15 years remaining) minimises total interest. Choosing a shorter term than remaining maximises interest savings but raises monthly payments.

7. Enter Closing Costs, the total upfront cost to refinance: lender fees, appraisal, title, legal charges, and any foreclosure penalty on the existing loan. If unsure, use 1–2% of the remaining balance as a conservative estimate for India, or 2–5% for the US.

8. Read the results, the dark card shows Monthly Savings and the break-even bar. The comparison table shows Current vs New side by side. The Refinance Summary card shows net lifetime benefit. If the term extension warning appears, consider shortening the new term before concluding the refinance is worthwhile.