Money and Pay
Refinance Calculator
Refinance arithmetic compares the current payment with a new annuity that may roll closing costs into the balance.
Educational estimate only. This is not lending, tax, payroll, or pension advice. Confirm rates, eligibility, and contract terms with the organisation that pays or lends.
Worksheet
Press Calculate to see the result.
Refinance arithmetic compares the current payment with a new annuity that may roll closing costs into the balance.
What this calculator answers
A 280,000 balance at 7.2 percent with 27 years left has one payment. Refinancing to 6.1 percent for 30 years with 4,500 of costs changes both payment and term. Break-even months are closing costs divided by the monthly saving when the payment falls. The page keeps the definition fixed while the ticket updates, so a hand check can match every intermediate term. The worksheet asks for Current balance, Current rate %, Years left, New rate %, New term years, Closing costs, and it refuses a blank that the formula cannot interpret. Treat the loaded example as a rehearsal for the live numbers you will type next, not as a claim about your own data.
The ticket reports the primary figure first, then the supporting counts and intermediate terms that produced it. Supporting counts and intermediate terms sit under the headline so a reader can see what was divided by what. When a checkbox or a tail setting changes the divisor or the rejection region, that choice appears in the steps rather than vanishing into a silent default.
The formula, written out
Refinance comparison uses this relationship.
compare old PMT with new PMT on (balance+costs); break-even ≈ costs / monthly saving
- n. Sample size or count of observations.
- x̄. Sample mean when a mean is used.
- s. Sample standard deviation when a spread is used.
- α. Significance level when a test or critical value is used.
The algebra follows the named textbook identity. Intermediate terms appear in the steps so a hand check can match the ticket. The algebra is the named textbook identity for this worksheet. Intermediate products and quotients appear in order so a calculator and a pencil can agree to the displayed rounding. If a neighbouring page uses a different divisor or a continuity correction, that page says so on its own ticket.
A full worked example
Example loaded in the worksheet
The form is prefilled with a small example so every arithmetic step can be checked by hand. Change one field after you finish the walkthrough and confirm the ticket moves the way the formula predicts.
Current PMT = $1,962.53. New PMT on $284,500.00 = $1,724.06. Break-even ≈ $4,500.00 / $238.48 ≈ 18.9 months.
| Current payment | $1,962.53 |
|---|---|
| New payment | $1,724.06 |
| Monthly saving | $238.48 |
| Break-even months | 18.9 |
A second situation
Higher costs
Current PMT = $1,962.53. New PMT on $288,000.00 = $1,745.26. Break-even ≈ $8,000.00 / $217.27 ≈ 36.8 months.
| Current payment | $1,962.53 |
|---|---|
| New payment | $1,745.26 |
| Monthly saving | $217.27 |
| Break-even months | 36.8 |
Changing one input that the formula is sensitive to moves the headline while the definition stays fixed on this page. The second example changes the feature that this formula is sensitive to, and the ticket shows the new figure beside the same definition. That contrast is the fastest way to see which input owns the movement.
What moves when the input moves
New rate fell to 5.8%. The headline result went from $1,962.53 to $1,962.53.
The nudged inputs
Current PMT = $1,962.53. New PMT on $284,500.00 = $1,669.31. Break-even ≈ $4,500.00 / $293.22 ≈ 15.3 months.
| Current payment | $1,962.53 |
|---|---|
| New payment | $1,669.31 |
| Monthly saving | $293.22 |
| Break-even months | 15.3 |
How to read the result
Say the unit, the sample size, and the formula name in the same sentence as the figure. Say the unit, the sample size or contract terms, and the formula name in the same sentence as the figure. A number without those three pieces invites a later reader to invent a definition that this page never used.
Write the result with its unit, the inputs that produced it, and the name of the formula. Write the result with its unit, the inputs that produced it, and the name of the formula. If the ticket shows a decision sentence, quote the alpha and the tail with it. If the ticket shows a money or dose figure, quote the rate and the schedule that produced it.
Assumptions that have to stay true
- Inputs match the information the formula asks for.
- Units are consistent across every field.
- Missing cells are blank, not typed zeros, unless a zero was observed.
If an assumption above is false, do not average the discomfort away. Change the worksheet or change the question. A correct arithmetic step on the wrong model is still the wrong answer for the decision you are trying to make.
Mistakes that change the answer
- Using a percent where a proportion is required, or the reverse.
- Reading a two-sided p-value as if it were one-sided without checking the tail box.
Where a different calculator is the honest choice
Open a neighbouring calculator when the question changes, rather than forcing this page to answer a different job. Related links under the essay open pages that keep their own formulas instead of hiding a mode switch inside this ticket.
When the job changes, move to a page built for that job: Mortgage Calculator, Loan Payment Calculator, Break-Even Calculator.
Check yourself
Using the loaded example, what is the headline figure?
Run the loaded example and read the first result on the ticket.
Using the result in a sentence
Coursework, lab notes, and survey plans are the usual homes for this worksheet. Keep the count, the unit, and the assumption list beside any copy of the number that leaves this browser tab.
A small sample and a violated assumption both shrink how far the figure can travel. Pair the headline with the steps before you staff a route, set a grade boundary, or compare two contracts from a single number.
Questions people ask next
01What definition does the Refinance Calculator commit to?
This page uses Refinance comparison: compare old PMT with new PMT on (balance+costs); break-even ≈ costs / monthly saving. The algebra follows the named textbook identity. Intermediate terms appear in the steps so a hand check can match the ticket. If a textbook uses a different divisor, a different continuity correction, or a different rounding rule, the last digits can move, so the definition is printed above the result. The worksheet asks for Current balance, Current rate %, Years left, New rate %, New term years, Closing costs, and it refuses a blank that the formula cannot interpret. Keep that printed definition in the sentence you write next to the figure so a later reader can rebuild the arithmetic without guessing which convention you chose.
02How should the worked example be read out loud?
In the loaded example the current payment is $1,962.53. Say the unit, the sample size, and the formula name in the same sentence as the figure. Say the unit and the count before you say whether the number is large or small. Read the steps in order rather than jumping to the headline, because the intermediate terms are where a swapped percent and proportion usually hide. If the ticket shows both a primary figure and a comparison figure, name which one you are quoting.
03What is the fastest way to get a misleading result?
Using a percent where a proportion is required, or the reverse. A small sample and a violated assumption both shrink how far the figure can travel. A second common failure is leaving a checkbox or tail setting in the wrong state and then treating the number as if the default had matched your plan. Reset the example, change one input, and confirm the ticket moves in the direction the formula predicts before you trust a live run.
04When should I leave this page for a different calculator?
Open a neighbouring calculator when the question changes, rather than forcing this page to answer a different job. The related links under the essay go to those worksheets, which keep their own formulas instead of hiding them in a mode switch. If the question changed from a summary to a test, from a payment to a refinance, or from a raw score to a percentile, switch pages rather than forcing this ticket to answer a job it was not built for.
05What belongs in the sentence next to the number?
Run the loaded example and read the first result on the ticket. Name the formula, the sample size or the inputs, and the unit before you compare the figure with someone else's. A bare number without those three pieces cannot be audited when a score, a rate, or a lab value is challenged later. Store the inputs beside the result whenever the figure will travel into a report.