Refinance & Balance Transfer Calculator
Will switching lenders actually save you money — and from which month?
Your loan against the new offer
When switching pays for itself
What switching costs
Year by year
The CSV has every month.
How this was calculated
Results are estimates for general information and planning, not financial advice. Banks and institutions may calculate differently (rounding, fees, rate changes). Confirm figures with your lender or a qualified adviser before deciding.
About the Refinance & Balance Transfer Calculator
A lower rate is not automatically a saving: the fees, the valuation and legal charges and any prepayment charge come first, and a new loan that runs longer can cost more interest even at a lower rate. This calculator runs both loans month by month — the one you have and the offer in front of you — and shows the new payment, the interest saved, the switching costs, the break-even month and the net benefit.
Choose whether the new loan keeps your remaining term, keeps your current payment (so it ends sooner), or runs for a term you enter. Add the processing fee, other charges, discount points, the tax on fees where one applies and the old lender’s prepayment charge. If you expect to sell or repay early, enter the months you will keep the loan — that often decides it. The new loan’s APR including its costs is shown beside the rate.
How to use it
- Enter the balance you still owe, the rate you pay now and the payments left on your current loan.
- Enter the new offer’s rate, and choose what the new loan keeps: your remaining term, your current payment, or a term of your own.
- Add the switching costs: the processing fee (a percentage or an amount), legal, valuation and stamp duty charges, discount points if the lender offers them, and the tax on fees (18% for GST in India).
- Enter the old lender’s prepayment or foreclosure charge, if any — in India there is none on a floating-rate loan to an individual for a non-business purpose.
- If you may sell or repay early, enter the months you expect to keep the loan; leave it empty to compare the whole term.
- Read the verdict, the break-even month and the table, then copy the summary or download the month-by-month CSV.
Examples
0.5% processing fee + 10,000 legal, 18% tax on fees, no prepayment charge
Payment 52,211.23 → 49,236.98 · costs 41,300 · interest saved 535,366 · net 494,066 · break-even in month 10 · APR of the new loan 8.64%
Costs 277,300 · net 258,066 · break-even in month 70 · APR 9.47%
A foreclosure charge can push break-even years out; check whether your loan may carry one.
The loan clears in 13 years 5 months instead of 15 years, and the interest saving is larger still
Payment 2,168.42 → 1,847.15 · over the full term the interest rises by 14,448, a net loss of 20,948 — but over the first four years it saves 4,648
The gain peaks in month 178 and falls after that, because the new loan runs five years longer.
Common uses
- Decide whether to transfer a home loan to a lender offering a lower rate.
- Check whether a US mortgage refinance pays back its closing costs before you move or sell.
- See whether to take a lower rate as a smaller payment or a shorter loan.
- Work out whether buying discount points is worth it for how long you will keep the loan.
How the break-even month is found
Both loans are run month by month at their own rate, so the comparison holds even when the terms differ:
payment = balance × i ÷ (1 − (1 + i)^−n), with i the yearly rate ÷ 12.
Each month the calculator adds up the interest each loan charges. The break-even month is the first month in which the interest saved so far covers the switching costs. That is more honest than dividing the costs by the monthly payment difference: a longer new loan has a smaller payment partly because it repays less principal, which is not a saving.
The net benefit is the interest saved over the period compared, less the switching costs. For a new loan that runs longer than the old one, the cumulative gain peaks and then falls — the old loan would have been repaid faster, so after a while it charges less interest than the new one. The calculator names that month, which tells you how long the switch stays worthwhile.
What the switching costs are
- Processing or administration fee of the new lender, often a percentage of the loan with a cap.
- Legal, valuation and technical charges, and in India the stamp duty or registration on a fresh mortgage deed, plus GST on the fees.
- Discount points: a payment to the lender for a lower rate. “One point equals one percent of the loan amount”, and “points lower your interest rate, in exchange for paying more at closing” — worth it mainly if you keep the loan a long time (CFPB on discount points).
- Prepayment or foreclosure charge of the old lender on the balance you clear.
The new loan’s APR here counts those costs: it is the rate at which the balance the loan clears, less the costs you pay for it, equals the present value of the new payments, stated as the monthly rate × 12 (Regulation Z, appendix J) with the effective annual rate beside it.
Prepayment charges in India
Under the Reserve Bank of India (Pre-payment Charges on Loans) Directions, 2025, a regulated lender “shall not levy pre-payment charges” on a floating-rate loan to an individual for a purpose other than business, with or without a co-obligant — and that applies “irrespective of the source of funds used for pre-payment of loans, either in part or in full”, so a balance transfer to another lender is covered, and no minimum lock-in may be imposed. For loans to individuals and micro and small enterprises for business purposes, commercial banks (other than small finance, regional rural and local area banks), Tier 4 urban co-operative banks, upper-layer NBFCs and All India Financial Institutions may levy none either; the other lenders in that list may levy none on sanctioned limits up to ₹50 lakh. The Directions apply to loans “sanctioned or renewed on or after January 1, 2026”; a lender may not charge anything that was not disclosed in the sanction letter, the loan contract and the key facts statement (RBI Directions).
So for a floating-rate home loan taken by an individual, enter 0 as the prepayment charge. For a fixed-rate loan, an older loan or a business loan, check the sanction letter and the key facts statement, which must state the charge (RBI circular on the Key Facts Statement).
Limitations
- Both loans are modelled at a fixed rate with equal monthly payments. A floating rate will move; run the calculator again with the rate you expect.
- Top-ups, cash-out refinancing and a change in loan amount are not covered: enter only the balance being transferred.
- Tax relief on interest is not included. Where interest is deductible, a lower interest bill also means a smaller deduction, so the net saving is less than shown.
- The time and paperwork of switching, insurance that has to be re-taken, and any fee your old lender charges for documents are not counted.
- Interest is charged monthly on the balance (rate ÷ 12). A lender using daily interest or a different rounding will differ by small amounts.
Privacy
Everything is calculated in your browser. The balances, rates and fees you enter are never uploaded or stored.
Frequently asked questions
How do I know if refinancing is worth it?
Compare the interest saved with the switching costs over the time you will really keep the loan. In the example, a 1-point rate cut on a 5,000,000 balance saves 535,366 of interest for 41,300 of costs, so it pays from month 10. If you plan to sell in three years, enter 36 months and check the net then.
What is the break-even point of a refinance?
The month in which the interest you have saved so far equals what the switch cost. Before it you are behind; after it you are ahead. This calculator counts the saving month by month instead of dividing the costs by the payment difference, which flatters a longer loan.
Should I keep the same term or the same payment?
Keeping the payment is usually better value: the loan ends sooner and the interest saving is larger. Keeping the term frees up cash each month. The calculator shows both — switch between “keeps my remaining term” and “keeps my current payment”.
Can my lender charge me for transferring the loan?
In India, not on a floating-rate loan to an individual for a non-business purpose, under the RBI’s Pre-payment Charges on Loans Directions for loans sanctioned or renewed from 1 January 2026; other loans may carry a charge, which must be in the sanction letter and the key facts statement. Elsewhere a prepayment penalty depends on the contract, so check it and enter it here.
Are discount points worth paying?
Only if you keep the loan long enough. A point costs 1% of the loan now and lowers the rate a little; the calculator counts it as a switching cost, so the break-even month tells you how long it takes to earn back. If you may move or refinance again soon, a no-point offer usually wins.
Why can a lower rate still cost more?
Because a new loan often starts a fresh, longer term. At 6.25% over 30 years instead of 7.25% over the 25 years you had left, the payment falls but the interest bill rises by 14,448 — the saving peaks around month 178 and then shrinks. Watch the net column in the table, not just the payment.