Refinance Savings Calculator
Compare your current mortgage to a refinance offer
Enter your current loan details and your proposed new rate and term to estimate monthly savings, break-even time, and total interest saved.
Refinance savings calculator to compare your mortgage options
Refinancing can lower your monthly payment, reduce the total interest you pay, or help you change the length of your loan. But a lower rate does not automatically mean a better deal. Fees, term changes, and cash-out amounts can erase the benefit. This refinance savings calculator helps you compare your current mortgage against a new refinance offer using a few inputs you can usually find on your latest bond statement or lender app.
To use the calculator, start with your current loan balance, your current interest rate, and how many years you have left. Then enter the new rate you were quoted. If you do not know the new term, leave it blank and the calculator will assume you refinance for the same remaining term. If you are considering taking cash out, add that amount so the new loan reflects the larger balance. If you have estimated closing costs, add those too so you can see how long it may take for your monthly savings to repay the upfront costs.
The results show a practical comparison, not just a single number. You will see your estimated current monthly payment versus the new monthly payment, your monthly saving (or increase), and a break-even estimate for closing costs. You will also see total remaining interest on the current loan versus the refinance scenario, which is often where the real cost difference hides. A refinance that lowers your monthly payment by stretching the term can look good month-to-month but increase total interest paid over time.
Assumptions and how to use this calculator
- This calculator assumes both loans are standard amortizing mortgages with monthly payments and a fixed interest rate for the full term.
- If you leave the new term blank, the calculator assumes the refinance term equals your remaining term. This avoids accidentally comparing a 30-year reset to an 18-year remaining loan.
- Cash-out is treated as additional principal added to the new loan balance. This typically increases the monthly payment and total interest even if the rate drops.
- Closing costs are treated as an upfront cost for break-even purposes. Some lenders allow costs to be rolled into the loan, which changes the economics.
- Results ignore taxes, insurance, escrow changes, penalties, and future rate changes. Use this as a first-pass decision tool, not a final quote.
Common questions
Why does my monthly payment drop but total interest increase?
This usually happens when the refinance term is longer than your remaining term. A longer term spreads the balance over more months, lowering the payment, but you pay interest for longer. If you want a refinance to reduce lifetime cost, compare loans using the same or shorter term, or consider paying extra each month if your lender allows it.
What is “break-even” and how should I interpret it?
Break-even is the number of months it takes for your monthly savings to add up to your closing costs. If closing costs are R20,000 and you save R500 per month, break-even is about 40 months. If you plan to sell or refinance again before that, the refinance may not make sense unless there are other benefits like improved cash flow or switching loan types.
What if I do not know my closing costs yet?
Leave closing costs blank to see the pure payment and interest comparison first. Then rerun the calculator with a rough estimate. Many people test a few realistic fee amounts to see how sensitive the decision is. If the refinance only works with unrealistically low fees, treat it as a warning sign.
How does cash-out refinancing affect savings?
Cash-out increases the new loan balance, which increases both the monthly payment and total interest. You can still refinance and “save” on the interest rate, but you may not save money overall because you are borrowing more. The right comparison is whether the cash-out amount is worth the added long-term cost versus alternatives like a separate loan or a smaller cash-out.
When is this calculator not a good fit?
If your rate is variable and can change, if your loan has unusual features (interest-only periods, balloon payments), or if your lender quote includes complex fee structures, this simplified model will not match perfectly. Use it to pressure-test the offer, then confirm details with a formal amortization schedule from the lender.