Real Estate
Refinance Cash Flow Calculator
Compare current and proposed mortgage payments, closing costs, cash-out proceeds, break-even timing, and cumulative interest before refinancing.
Loan replacement decision
Compare refinance savings with upfront cost and a reset amortization clock
A lower payment is not enough: this page separates monthly relief, break-even time, interest paid over the chosen holding period, and cash-out proceeds.Decision curve
Cumulative payment savings versus refinance cost
The crossing is the simple payment break-even; the curve does not treat cash-out proceeds as savings.Detailed calculation process
Use the amortizing-payment equation on both loans before comparing cash flows
General symbolic formulas
PMT(P,i,n) = Pi / [1 - (1+i)-n]Pnew = B + C + X when costs are financedF = C + Pnewq when paid in cashS = PMTold - PMTnewBE = F / SBenefith = hS - FMonthly rates equal annual percentage rates divided by 12 and 100. Points are charged on new principal. Break-even uses only recurring payment relief against upfront cash cost.
Symbol definitions
P, B principal and current balance ($)i monthly interest rate (decimal/month)n payment count (months)C closing costs ($)X cash-out principal ($)q points rate (decimal)S monthly payment relief ($/month)h holding period (months)
Worked substitution with current inputs
Selected-horizon comparison
| Month | Old cumulative payments | New cumulative payments | Net savings after cost | Decision status |
|---|
Use steps
- Enter the statement balance, note rate, and exact remaining months.
- Quote the new rate, term, points, and all lender/title costs.
- Set the period you reasonably expect to keep the loan.
Practical comparisons
Short hold: test 24 months before a planned move.
Term match: set the new term equal to remaining months to isolate rate savings.
Limitations
The simplified benefit compares scheduled principal-and-interest payments and upfront cash cost. It omits taxes, escrow, prepayment penalties, tax effects, opportunity cost, changing insurance, and the value of balance differences.
Refinance FAQ
Why can a longer term lower payment but increase interest?
Principal is spread across more months, so it can remain outstanding longer.
Are cash-out proceeds a benefit?
No. Cash out is additional borrowed principal and should be evaluated by its use and repayment cost.
What if monthly savings are negative?
There is no simple payment break-even; refinance may still serve a different objective, but not monthly payment savings.