Compare the same outstanding principal
Enter the remaining balance, nominal annual interest rate and actual months left on your current loan. The model derives its payment from those inputs, so it will differ from a loan with prior extra payments, a recast, a balloon or a different accrual convention. Enter the proposed fixed rate and term for the replacement loan.
Both schedules assume monthly payments at period end and rate divided by 12. The new principal equals the old balance. Fees are paid upfront; this is not a cash-out or financed-cost refinance. No tax, insurance, prepayment penalty, adjustable rate or lender credit is included.
Monthly savings and lifetime cost answer different questions
A longer term can reduce the monthly payment while increasing total interest. A shorter term can increase the payment while reducing interest. The comparison therefore shows payment difference, interest over each remaining term and total undiscounted payments plus new upfront costs separately.
These totals compare each loan through its own final payment. For a sale or another refinance before maturity, compare payments made, costs and outstanding balances at the same date. The tool does not calculate that holding-period comparison or net present value.
Simple fee recovery has a limited meaning
For positive monthly payment savings, the simple ratio is upfront costs / monthly savings, rounded up to a whole month. Hypothetical costs of $4,500 divided by $150 monthly savings give 30 months. The tool reports a period only if it falls while both loans are still active; otherwise the constant-payment-difference assumption no longer holds.
This ratio is not a recommendation or an economic break-even. It ignores differences in principal repayment and the value of money over time. A shorter loan with a higher monthly payment can save interest even though this ratio does not apply. With no upfront costs, the label says so without claiming immediate economic benefit.
Use quoted points and costs
One standard discount point equals 1% of principal, but it has no universal rate reduction. At a $300,000 principal, one standard point costs $3,000. Enter the lender’s offered rate after points yourself. The default cost per point is 1%; changing it represents a custom charge assumption.
Closing Costs excludes the points entered separately, preventing double counting. Use the lender’s actual quote instead of a generic percentage. Compare offers made at similar times and check whether fees are paid in cash, financed or exchanged for a different rate.
Read the schedule correctly
The table shows month 1, each 12th month and the final month. A row is a single monthly payment, not an annual total. The calculation uses all months and retains fractional cents until display; lender rounding and payment dates can change actual totals.