Loan Refinance Break-Even Calculator — Months to Recover Cost
CalculatorA loan refinance break-even calculator estimates simple monthly interest savings from a rate difference and divides switching costs by those savings.
What is it
A lower rate does not always mean immediate savings when prepayment fees, taxes, setup fees, or platform fees apply. This tool applies the old-new rate difference to the outstanding balance, estimates simple monthly interest savings, and shows how many months are needed to recover switching costs. It does not model amortization schedules, taxes, or lender underwriting.
monthly savings = balance × (old rate − new rate) ÷ 100 ÷ 12; break-even months = cost ÷ monthly savings
How to use
- 1Enter the outstanding balance and current annual rate.
- 2Enter the new annual rate and total switching costs.
- 3Check monthly savings and months to break even.
Reference
| Balance | Rate gap | Cost | BreakEven |
|---|---|---|---|
| 100,000,000 | 1pp | 500,000 | about 6 months |
| 200,000,000 | 0.5pp | 1,000,000 | about 12 months |
Sources & standards
- MDN Web Docs: Client-side web APIs - MDN Web Docs
- Arithmetic operations - Wikipedia
FAQ
Is this the same as a real loan payoff schedule?
No. This is a quick rate-gap comparison. Exact payments depend on product terms, amortization method, and fees.
What if the new rate is higher?
There is no monthly saving, so break-even does not apply.
Is input sent to a server?
No. The calculation runs only in your browser.