Refinance calculator

Our loan refinance calculator helps you estimate the potential savings and costs associated with refinancing your existing loan.

Page written by Ian Hawkins. Last reviewed on March 11, 2026. Next review due April 1, 2027.

Current loan

Remaining balance

.00

New loan

New loan term

20 years

Interest rate

This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.

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Principal/loan amount

Monthly payment

Weekly payment

Daily payment

Length

0 months

Total monthly payments

Total interest

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What is Loan refinancing?

Loan refinancing involves replacing an existing loan with a new one, often with different terms. The primary goal is to obtain more favourable conditions, such as lower interest rates, reduced monthly payments, or a different loan term. By refinancing, borrowers can save money, manage their debt more effectively, or adjust their financial situation to better suit their current needs.

Reasons to refinance your loan

Lower interest rates: Refinancing to a loan with a lower interest rate can save you a significant amount of money over the life of the loan.
Reduce monthly payments: Extending the loan term can lower your monthly payments, making it easier to manage your budget.
Change loan term: Shortening the loan term can help you pay off the debt faster and save on interest, while extending the term can lower your monthly payments.
Switch loan types: You might want to switch from a variable-rate loan to a fixed-rate loan for more predictable payments.
Consolidate debt: Refinancing multiple loans into a single loan can simplify your finances and potentially lower your overall interest rate.
Access equity: For mortgages, refinancing can allow you to tap into the equity you’ve built up in your home, providing funds for other needs.

Things to consider before refinancing

Costs and fees: Refinancing often comes with costs such as application fees, appraisal fees, and closing costs. Ensure the savings outweigh these expenses.
Loan term: Extending your loan term can reduce monthly payments but might increase the total interest paid over time. Shortening the term can save on interest but increase monthly payments.
Interest rates: Compare the new interest rate with your current rate to ensure refinancing is beneficial.
Credit score: Your credit score affects the terms and rates you qualify for. Check your credit score before applying to refinance.
Break-even point: Calculate how long it will take for the savings from refinancing to cover the costs associated with it. If you plan to move or pay off the loan soon, refinancing may not be worth it.
Lender terms: Different lenders offer different terms and conditions. Shop around and compare offers from multiple lenders.

How to calculate loan refinance costs

Calculating loan refinance costs involves several factors:

Application fees: Some lenders charge an application or origination fee when you apply for a new loan. This fee can vary widely depending on the lender and the type of loan.
Closing costs: Similar to when you initially obtained your business loan, refinancing typically involves closing costs. These may include fees for appraisal, title search, attorney services, and other administrative expenses.
Prepayment penalties: Check if your current loan carries any prepayment penalties for paying off the loan early. If so, factor in these costs when calculating the total cost of refinancing.
Interest rate: The new interest rate on your refinanced loan will determine your monthly payments and the total interest you’ll pay over the life of the loan. A lower interest rate can lead to significant savings over time.
Loan term: Consider whether you’re extending or shortening the term of your loan. While a shorter term can save you money on interest in the long run, it may also result in higher monthly payments.

To calculate the total cost of refinancing, add up all the fees and costs associated with obtaining the new loan. Then, compare this figure with the potential savings you’ll achieve through lower monthly payments and reduced interest over the life of the loan. This will help you determine whether refinancing is a financially prudent decision for your situation.