New term does not extend the remaining payoff period.
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Refinance Calculator: 19 months to break even. Old payment 3,038.43; new payment 2,844.59; monthly saving 193.84. Old remaining interest 461,529.67; new interest plus costs 406,877.41.
Formula applied
The exact method behind this answer
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Monthly payment = P × r ÷ (1 − (1 + r)^−n). Monthly saving = old payment − new payment. Break-even months = closing costs ÷ monthly saving.
Apply the formulaMonthly payment = P × r ÷ (1 − (1 + r)^−n). Monthly saving = old payment − new payment. Break-even months = closing costs ÷ monthly saving.19 months to break evenOld payment 3,038.43; new payment 2,844.59; monthly saving 193.84. Old remaining interest 461,529.67; new interest plus costs 406,877.41.
Your live breakdown
Current inputs in the calculation
These values come from the controls above and update when the calculator changes.
Current loan balance
450,000 $
Current annual rate
6.5 %
Current years left
25 years
New annual rate
5.8 %
New term
25 years
Refinance costs
3,500 $
Resulting answer
19 months to break even
Old payment 3,038.43; new payment 2,844.59; monthly saving 193.84. Old remaining interest 461,529.67; new interest plus costs 406,877.41.
Answer
19 months to break even
Live support
Old payment 3,038.43; new payment 2,844.59; monthly saving 193.84. Old remaining interest 461,529.67; new interest plus costs 406,877.41.
Assumptions used
What this answer assumes
Estimate only; compare fees, term reset, lender rules and advice before refinancing.
Rates are fixed for the comparison period.
Closing costs are paid upfront and not rolled into the new loan unless entered in the balance.
Taxes, insurance, offset accounts and early-exit fees are outside the estimate.
Master’s Tip
How to use the result well
Master’s Tip: compare both payment saving and total interest. A longer new term can lower payment while increasing lifetime cost.
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Save the inputs, result, formula, assumptions, page URL and date together so the calculation can be reviewed later.
Current loan balance
450,000 $
Current annual rate
6.5 %
Current years left
25 years
New annual rate
5.8 %
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Explain it like I'm 12
The refinance calculator compares the current payment with the proposed refinance payment, then divides upfront costs by monthly savings to estimate break-even time.
Monthly payment = P × r ÷ (1 − (1 + r)^−n). Monthly saving = old payment − new payment. Break-even months = closing costs ÷ monthly saving.
Worked example
A $450,000 balance at 6.5% over 25 years compared with 5.8% over 25 years saves about $202/month before costs. With $3,500 costs, break-even is about 17 months.
Professional note
Master’s Tip: compare both payment saving and total interest. A longer new term can lower payment while increasing lifetime cost.
Regional and unit assumptions
Standard amortising-loan mathematics. Treat as financial education, not personal financial advice.
Assumptions and limitations
Rates are fixed for the comparison period.
Closing costs are paid upfront and not rolled into the new loan unless entered in the balance.
Taxes, insurance, offset accounts and early-exit fees are outside the estimate.
Methodology & Accuracy
How this calculator is checked
CalculationTime pages are built around visible arithmetic: the formula, assumptions, worked example and practical limitations are shown so the result can be checked rather than simply trusted.
Formula used
Monthly payment = P × r ÷ (1 − (1 + r)^−n). Monthly saving = old payment − new payment. Break-even months = closing costs ÷ monthly saving.
Standard or basis
Standard amortising-loan mathematics. Treat as financial education, not personal financial advice.
Where a calculator follows a named legal, trade or industry standard, that standard is cited visibly. Otherwise the page uses transparent general arithmetic and states its limits.
Master's Tip
Master’s Tip: compare both payment saving and total interest. A longer new term can lower payment while increasing lifetime cost.
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