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Mortgage Refinance Calculator

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Compare your current mortgage against a new refinance offer. Find monthly savings, break-even point, and total interest saved over the remaining loan life.

── Current Loan
Remaining Loan Balance
$
Current Interest Rate
% p.a.
Years Remaining on Loan
yrs
── New Refinance Offer
New Interest Rate
% p.a.
New Loan Term
Closing Costs
$

Monthly Increase

—/mo more

What is a Refinance?

A mortgage refinance calculator lets you compare your existing home loan against a proposed new loan to determine whether refinancing is financially beneficial. Refinancing — or balance transfer as it is called in India — replaces your outstanding principal with a new loan at a different interest rate, a revised repayment term, or both. The numbers that matter most are not simply the rate difference; they include the closing costs you pay upfront, how long you intend to stay in the property, and the total interest over the full new term.

The fundamental insight this tool delivers is the break-even period: the precise number of months your cumulative monthly savings must accumulate to recover the closing costs. If you refinance and then sell the property before reaching break-even, the refinance costs you money — even if the new rate is lower.

There is also a term-length trap that borrowers frequently miss. Extending from a 20-year remaining loan into a fresh 30-year term at a slightly lower rate often increases total lifetime interest, even while it reduces the monthly payment. This calculator shows both the current remaining interest and the new total interest side by side so you can see the full picture, not just the headline monthly saving.

For Indian borrowers, this is especially relevant given the floating-rate structure of most home loans. When the RBI cuts the repo rate and banks pass on the benefit, existing borrowers are often left on older, higher floating rates — while new borrowers enjoy lower ones. A balance transfer to a lender offering EBLR-linked loans can save lakhs of rupees. Use our Mortgage Calculator to model your new EMI from the ground up, and this refinance calculator to quantify the benefit of switching.

The tool supports six currencies — USD, INR, EUR, GBP, CAD, AUD — making it equally useful for NRIs managing overseas mortgages and Indian homeowners evaluating balance transfers.

How to use this Refinance calculator

  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.

Formula & Methodology

Monthly P&I formula (both current and new loan):

M = P × r(1 + r)ⁿ / ((1 + r)ⁿ − 1)

Where:
- M = monthly principal and interest payment
- P = outstanding loan balance (same for both scenarios)
- r = monthly interest rate = annual rate ÷ 12 ÷ 100
- n = total months = loan term in years × 12

Break-even period:

Break-even (months) = Closing Costs ÷ Monthly Savings

Interest calculations:

Current Remaining Interest = (Current Monthly P&I × Remaining Months) − Remaining Balance
New Total Interest = (New Monthly P&I × New Term Months) − Remaining Balance
Interest Saved = Current Remaining Interest − New Total Interest
Net Savings = Interest Saved − Closing Costs

Worked example (INR):

Outstanding balance: ₹60,00,000 | Current rate: 9% p.a. | Years remaining: 20
New rate: 7.5% p.a. | New term: 20 years | Closing costs: ₹50,000

Current monthly EMI:
r = 9 ÷ 12 ÷ 100 = 0.0075 | n = 240
M = 60,00,000 × 0.0075 × (1.0075)²⁴⁰ / ((1.0075)²⁴⁰ − 1) ≈ ₹53,990/month

New monthly EMI (7.5% for 20 years):
r = 0.00625 | n = 240
M = 60,00,000 × 0.00625 × (1.00625)²⁴⁰ / ((1.00625)²⁴⁰ − 1) ≈ ₹48,290/month

Monthly Savings: ₹53,990 − ₹48,290 = ₹5,700/month
Break-even: ₹50,000 ÷ ₹5,700 ≈ 9 months
Current Remaining Interest: ₹53,990 × 240 − ₹60,00,000 ≈ ₹69,57,600
New Total Interest: ₹48,290 × 240 − ₹60,00,000 ≈ ₹55,89,600
Interest Saved: ₹69,57,600 − ₹55,89,600 = ₹13,68,000
Net Savings (after ₹50,000 closing costs): ≈ ₹13,18,000

For a full month-by-month breakdown of how the principal reduces under the new loan, see our Loan Amortization Calculator.

Assumptions:
- Both the current and new loan use a fixed interest rate for the full term. Variable-rate outcomes will differ.
- Closing costs are a one-time upfront charge, not rolled into the new loan. If closing costs are capitalised into the new loan balance, adjust the Remaining Loan Balance input upward accordingly.
- Monthly savings are compared only on the P&I component — property tax, insurance, and HOA are unchanged by refinancing and excluded from this calculation.

Frequently Asked Questions

Mortgage refinancing replaces your existing home loan with a new one — typically at a lower interest rate, a different loan term, or both. The new lender pays off your outstanding balance, and you begin repaying the new loan under revised terms. In India, this is commonly called a home loan balance transfer, where you move your outstanding principal from one bank or HFC to another offering better terms.
The break-even period is the number of months it takes for your cumulative monthly savings to equal the upfront closing costs you paid to refinance. For example, if closing costs are $4,000 and you save $200 per month, the break-even is 20 months. If you sell or move before reaching break-even, the refinance will have cost you money rather than saved it.
In the US, refinancing closing costs typically run 2–5% of the loan amount, covering lender origination fees, appraisal, title insurance, and legal costs — commonly $3,000–$8,000 on a $300,000 loan. In India, balance transfer costs include processing fees (0.25–1% of the outstanding balance), technical and legal valuation charges, and foreclosure penalties on the existing loan if it carries a fixed rate. Use the Closing Costs input to model your exact scenario.
Cash-out refinancing involves taking a new loan for more than your outstanding balance and receiving the difference as cash. For example, if your remaining balance is $200,000 but your home is worth $400,000, you might refinance for $280,000 and pocket $80,000. This tool models rate-and-term refinancing (same balance, new rate/term); for cash-out scenarios, increase the Remaining Loan Balance input to reflect the new, higher loan amount.
Refinancing replaces the loan entirely — a new agreement, new interest rate, new term — while prepayment means making extra principal payments on your existing loan to reduce the outstanding balance and cut interest. Both reduce total interest paid, but refinancing is better when market rates have fallen significantly below your current rate, whereas prepayment suits you when you simply have surplus cash and your current rate is already competitive. Use our [Mortgage Payoff Calculator](/mortgage-payoff-calculator/) to model the prepayment route.
A shorter term (e.g. switching from a 25-year remaining loan to a 15-year term) sharply cuts total interest paid but raises your monthly P&I. A longer term lowers monthly payments but extends the repayment timeline and often increases lifetime interest even if the rate drops — the calculator's Total Interest comparison column will show this clearly. Choose a shorter term if you can comfortably manage the higher monthly payment; choose a longer term only if immediate cash-flow relief is the primary goal.
Refinancing is generally not worth it if you plan to sell before the break-even period. If closing costs are $5,000 and monthly savings are $250, you need 20 months to break even. Selling at month 15 means you paid $5,000 in closing costs and recouped only $3,750 — a net loss of $1,250. The break-even figure shown in this calculator is your key decision threshold: only refinance if you are confident you will hold the property beyond that date.
Select your currency, then enter your Remaining Loan Balance (the current outstanding principal), your Current Interest Rate, and the Years Remaining on your existing loan. Under the New Refinance Offer section, enter the New Interest Rate being offered, choose the New Loan Term, and enter your expected Closing Costs. The calculator immediately shows monthly savings, break-even period, and a side-by-side comparison of total interest under both scenarios.
On a remaining balance of ₹60,00,000 with 20 years left, refinancing from 8% to 6.5% reduces the monthly EMI from approximately ₹50,200 to ₹44,800 — a saving of about ₹5,400 per month. Over the remaining 20 years, this amounts to roughly ₹13,00,000 in interest saved (the exact figure depends on the new loan term you choose). Use the calculator with INR selected and your exact figures for a precise estimate.
A home loan balance transfer in India is the direct equivalent of mortgage refinancing — you transfer your outstanding home loan principal from your current lender to a new bank or HFC offering a lower interest rate or better terms. Most major Indian banks (SBI, HDFC, ICICI, Axis, Kotak) actively compete for balance transfers. Costs include a processing fee (typically 0.25–1% of the outstanding amount), legal and technical charges, and a foreclosure penalty on fixed-rate loans. Use the INR currency option in this calculator to model Indian balance transfers accurately.
In India, interest payments on a self-occupied home loan remain deductible under Section 24(b) up to ₹2 lakh per financial year, and principal repayments qualify under Section 80C up to ₹1.5 lakh per year — these deductions continue after a balance transfer since the loan purpose (home purchase/construction) is unchanged. However, the processing fee paid for the balance transfer is generally not deductible as a separate expense. Consult a tax adviser for your specific situation.
Yes — run the calculator once with the first offer's interest rate and term, note the Monthly Savings and Total Interest Saved, then change the New Interest Rate and New Loan Term to the second offer and compare. For a more granular comparison including fees and APR differences, pair this tool with our [APR Calculator](/apr-calculator/) to see the true annual cost of each offer inclusive of all charges.
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