Compare the current loan with a new rate, term, and closing costs. SmartFin shows the modeled payment difference, break-even point, and interest difference.
The new loan lowers the modeled payment by $240 a month. The modeled break-even point is 21 months. Modeled total interest is $37,531 lower ($347,515 against $385,045).
Inputs: $300,000 balance; current loan 7% with 28 years left ($2,039 a month); new loan 6% over 30 years ($1,799 a month); $5,000 closing costs.
| Rate | Term | Monthly payment | Modeled total interest | |
|---|---|---|---|---|
| Current loan | 7% | 28 years left | $2,039 | $385,045 |
| New loan | 6% | 30 years | $1,799 | $347,515 |
Both loans start from the same $300,000. The $5,000 of closing costs is paid separately: it sets the break-even point and is not part of either interest figure.
A lower payment can come from a longer repayment period. Compare payment, term, closing costs, and total modeled interest together.
To see the rate on its own, keep the 28 years left: at 6% that lowers the modeled payment by $193 a month and modeled total interest is $65,000 lower. Over 30 years instead, the new loan lowers the modeled payment by $240 a month and modeled total interest is $37,531 lower.
Break-even is the point at which the cumulative drop in the monthly payment recovers the closing costs entered: closing costs ÷ monthly payment difference, rounded up to a whole month. It compares payments only. It does not look at how much of each payment is interest, and it does not account for a new loan running longer than the old one. If the new payment is not lower, there is no break-even point.
Both loans are modeled at fixed rates with the same starting balance. Cash taken out, closing costs added to the loan, points, taxes and insurance are not included.
Refinancing a $300,000 loan from 7% with 28 years left to 6% over 30 years lowers the modeled payment by $240 a month and leaves modeled total interest $37,531 lower. The modeled break-even point is 21 months. The result uses the inputs shown and the method described on this page. It excludes cash-out, points, taxes and insurance. Reproduce the calculation here: https://smartfin.fyi/refinance-calculator.html?currentBalance=300000¤tRate=7¤tTerm=28&newRate=6&newTerm=30&closingCosts=5000.
Yes. A longer new term can reduce the scheduled payment while increasing total modeled interest. On these inputs, keeping 7% but starting again over 30 years lowers the modeled payment by $43 a month and modeled total interest is $33,481 higher.
A lower rate alone does not determine the outcome. The calculator shows the payment, the term, the closing costs and the total modeled interest for the inputs entered, so they can be compared together.
No. In this calculator closing costs only set the break-even point. The interest figures compare interest only, and the $5,000 is a separate cost.