CalculationTime

Refinance Radar

Compare your current loan with a refinance offer to see monthly saving, upfront switching costs, break-even month and estimated interest saved.

Live math canvas

Your numbers, formula and explanation together

Refinance Radar: Month 8 break-even. 0.36% rate saving · first-month interest saving 174.00 · switching costs 1,050.00 · estimated net saving 27,823.58 over 240 months · payoff around August 2046 · break-even around month 8.

Formula applied

The exact method behind this answer

CalculationTime keeps the method visible so the number can be checked instead of blindly trusted.

Monthly payment = P × r ÷ (1 − (1 + r)^−n). Current interest uses the remaining balance minus any offset balance. New-loan interest uses the offered rate, or a weighted split between the new rate and current rate when split-loan mode is selected. Total upfront cost = discharge fee + fixed-rate break costs if selected + early repayment penalty + valuation fee + legal costs + establishment fee + rate-lock costs. Break-even month = first month where cumulative interest saving reaches total upfront cost, plus any processing delay expressed in months.
  1. Apply the formulaMonthly payment = P × r ÷ (1 − (1 + r)^−n). Current interest uses the remaining balance minus any offset balance. New-loan interest uses the offered rate, or a weighted split between the new rate and current rate when split-loan mode is selected. Total upfront cost = discharge fee + fixed-rate break costs if selected + early repayment penalty + valuation fee + legal costs + establishment fee + rate-lock costs. Break-even month = first month where cumulative interest saving reaches total upfront cost, plus any processing delay expressed in months.Month 8 break-even0.36% rate saving · first-month interest saving 174.00 · switching costs 1,050.00 · estimated net saving 27,823.58 over 240 months · payoff around August 2046 · break-even around month 8.

Your live breakdown

Current inputs in the calculation

These values come from the controls above and update when the calculator changes.

Remaining balance
580,000 $
Enter what you still owe on the current loan.
Current interest rate
6.15 % p.a.
Use the nominal annual rate on the current loan.
Months remaining
240 months
Enter the remaining term you want to compare.
Offset account balance
0 $
Optional offset balance that reduces interest on the current loan path.
New interest rate
5.79 % p.a.
Use the rate offered by the new lender.
Current loan fixed rate?
No
Fixed-rate loans may have lender break costs if exited early.
Fixed-rate break costs
0 $
Only counted when the current loan fixed-rate option is set to yes.
Discharge / exit fee
250 $
What the current lender charges to release the loan.

Resulting answer

Month 8 break-even

0.36% rate saving · first-month interest saving 174.00 · switching costs 1,050.00 · estimated net saving 27,823.58 over 240 months · payoff around August 2046 · break-even around month 8.

Answer
Month 8 break-even
Live support
0.36% rate saving · first-month interest saving 174.00 · switching costs 1,050.00 · estimated net saving 27,823.58 over 240 months · payoff around August 2046 · break-even around month 8.

Assumptions used

What this answer assumes

Best for a first-pass refinance decision where the main question is whether the rate saving covers the cost of switching before the loan ends.

  • The comparison keeps the same starting balance for both loans.
  • Rates are treated as fixed nominal annual rates converted to monthly periods.
  • Switching costs are treated as upfront costs, not rolled into the new loan.
  • Offset balance reduces the current-loan interest path only; offset, redraw and package-account features on the new loan are not modelled.
  • Term restructure uses the new term for the new-loan payment while the comparison still reports savings over the current remaining term.
  • Split-loan mode treats the fixed portion at the new rate and the variable portion at the current rate as a simplified weighted interest comparison.

Master’s Tip

How to use the result well

Master's Tip: a lower rate is not enough by itself. Print the cost line, payoff date, break-even month and total remaining interest saving before switching lenders.

Printable record

What belongs in the saved calculation

Save the inputs, result, formula, assumptions, page URL and date together so the calculation can be reviewed later.

Remaining balance
580,000 $
Enter what you still owe on the current loan.
Current interest rate
6.15 % p.a.
Use the nominal annual rate on the current loan.
Months remaining
240 months
Enter the remaining term you want to compare.
Offset account balance
0 $
Optional offset balance that reduces interest on the current loan path.

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Formula

Monthly payment = P × r ÷ (1 − (1 + r)^−n). Current interest uses the remaining balance minus any offset balance. New-loan interest uses the offered rate, or a weighted split between the new rate and current rate when split-loan mode is selected. Total upfront cost = discharge fee + fixed-rate break costs if selected + early repayment penalty + valuation fee + legal costs + establishment fee + rate-lock costs. Break-even month = first month where cumulative interest saving reaches total upfront cost, plus any processing delay expressed in months.

Worked example

A $580,000 balance at 6.15% with 240 months remaining compared with 5.79% has about $174 first-month interest saving. With $1,050 total switching costs and a 21-day processing delay, the practical break-even is about month 8. If valuation, legal, break or rate-lock costs change, the break-even month moves with them.

Professional note

Master's Tip: a lower rate is not enough by itself. Print the cost line, payoff date, break-even month and total remaining interest saving before switching lenders.

Regional and unit assumptions

General amortising-loan mathematics for refinance comparison. This is an educational planning calculator, not financial advice, credit assistance or a lender quote.

Assumptions and limitations

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). Current interest uses the remaining balance minus any offset balance. New-loan interest uses the offered rate, or a weighted split between the new rate and current rate when split-loan mode is selected. Total upfront cost = discharge fee + fixed-rate break costs if selected + early repayment penalty + valuation fee + legal costs + establishment fee + rate-lock costs. Break-even month = first month where cumulative interest saving reaches total upfront cost, plus any processing delay expressed in months.

Standard or basis

General amortising-loan mathematics for refinance comparison. This is an educational planning calculator, not financial advice, credit assistance or a lender quote.

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: a lower rate is not enough by itself. Print the cost line, payoff date, break-even month and total remaining interest saving before switching lenders.

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Questions

What is the refinance break-even point?

It is the first month where the accumulated interest saving from the lower rate has covered the upfront cost of switching loans.

Why does processing time matter?

A refinance takes time to settle. The calculator converts processing days into an approximate delay so the break-even date reflects the wait before the new loan starts.

What costs should I include?

Include discharge fees, break costs, early repayment penalties, valuation, legal, establishment, rate-lock and other lender costs that you need to pay or add to the loan because of the switch.

What if the new loan has a different term?

Turn on the term restructure option and enter the new loan term. Extending the term can lower payment while increasing lifetime interest, so compare the total interest line too.

Can I include an offset account?

Yes. Enter the current offset balance to reduce the interest calculated on the current loan path. The calculator does not model a new offset facility unless you reflect that in the rate and cost assumptions.

Can I test a split fixed and variable refinance?

Yes. Turn on split-loan mode and set the fixed portion percentage. The fixed portion uses the new rate and the variable portion uses the current rate as a simple weighted scenario.

Is refinancing always worth it when break-even is soon?

Not always. The calculator shows the arithmetic, but your plans to sell, refinance again, change rate type or use offset/redraw features can change the decision.

Calculation note

Refinance decisions are timing problems as much as rate problems: a borrower pays switching costs now in exchange for lower interest over future months.

The break-even month keeps the decision honest

A lower advertised rate can still be a weak deal if fees are high or the borrower plans to leave before the savings catch up.

Interest saving should be visible month by month

Comparing amortisation schedules keeps the calculation tied to the remaining balance, not just a rough rate difference.

Processing delays move the practical answer

A refinance normally takes days or weeks to settle, so the useful answer is not only costs divided by saving. It is when the borrower actually gets ahead.

Sources and further readingConsumer Financial Protection Bureau — MortgagesConsumer Financial Protection Bureau — Loan Estimate explainer