The refinancing calculator shows the benefit of replacing your current loan or mortgage with a new one at a lower rate. Enter the remaining balance, remaining term and current rate — then the terms of the new loan. The calculator compares monthly payments and total interest, and you immediately see whether refinancing is worth it.
Refinancing means paying off an existing loan or mortgage with a new loan, usually at a lower interest rate. The borrower gets a lower monthly payment and less total interest, and sometimes a shorter term. The bigger the rate difference, the more worthwhile it is. Do not confuse it with restructuring: restructuring changes the terms of the same loan at the same bank, while refinancing is a new loan — at the same or a different bank — that pays off the old one.
In the “Current loan” block, enter the remaining balance (check your payment schedule or mobile banking app), the remaining term in months and your current rate. In the “New loan” block, enter the rate you can get, the desired term and the arrangement costs — fees and mandatory insurance. The calculator shows the new monthly payment, the monthly savings and the total savings over the full term, net of costs.
Refinancing makes sense when the new rate is about 2 or more percentage points lower and more than a year remains on the loan. The larger the balance and the remaining term, the bigger the savings. Avoid shortening the term too much if your goal is a lower payment: with a much shorter new term the payment can actually rise. And watch the hidden costs: insurance, fees and card issuance can eat up all the savings — that is why the calculator has the arrangement costs field.
Check with your current bank whether there is an early repayment penalty (usually there is none, but older contracts are worth reviewing). Compare the annual percentage rate (APR), not just the headline rate: insurance and fees are included in it. And keep in mind that once the new loan is issued, your credit history gets a new entry and the old loan is closed.
The monthly payment is calculated as A = P × r / (1 − (1 + r)−n), where P is the loan amount, r is the monthly rate (annual / 12) and n is the term in months. The calculator applies it twice — for the current and for the new rate — and the savings are the difference between the total payments.
The calculation is preliminary. Check the exact terms with your bank.