RefinanceCalculatorTools

Refinance Payoff Impact Calculator

See what redirecting the refinance saving into extra principal does to the payoff date and the interest total.

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Free · No sign-up · Runs in your browser

A refinance produces a monthly saving, and what happens to that saving determines whether the refinance was a good decision. Absorbed into spending, it lowers the cost of the month and raises the cost of the loan by extending the term.

Paid back into principal, it does something quite different: it keeps the payment where it was and shortens the loan dramatically. This calculator shows exactly how much.

Your numbers

Results update as you type. Nothing is sent anywhere.

Result

Interest saved

$100,647

Time removed

8.4 years

Months removed
101 months
Required payment
$1,703
Payment with the extra
$1,983
Interest at the required payment
$313,212
Interest with the extra
$212,565
Payoff at the required payment
360 months
Payoff with the extra
259 months

Extra amounts are applied to principal after that month’s interest, which is how most servicers handle them. Confirm your servicer does not hold extra funds as a prepaid future payment.

Paying an extra 280 each month removes 101 payments from the schedule.

Accelerated payoff by year

YearPrincipal paidInterest paidRemaining balance
1$7,487$16,313$292,513
2$7,910$15,891$284,603
3$8,356$15,445$276,247
4$8,827$14,973$267,420
5$9,325$14,475$258,095
6$9,851$13,949$248,244
7$10,407$13,394$237,837
8$10,994$12,807$226,843
9$11,614$12,187$215,229
10$12,269$11,531$202,960

How to use the refinance payoff impact calculator

  1. Enter the new balance, the new rate and the new term after refinancing.
  2. Enter the monthly saving from the refinance as the extra payment.
  3. Add any lump sum you plan to apply.
  4. Compare the new payoff against the full term.

What people use this for

  • Deciding what to do with the saving from a refinance.
  • Recovering the term extension a refinance created.
  • Setting an overpayment that matches the old payment exactly.
  • Modelling a lump sum applied at the time of refinancing.

Worked examples

Every figure below is produced by running this calculator against the example inputs, so the numbers always match the tool.

Redirecting a $280 monthly saving

A $300,000 balance at 5.5% over 30 years, with the $280 saving paid back into principal.

Interest saved
$100,647
Time removed
8.4 years
Payoff with the extra
259 months

Redirecting the saving plus a lump sum

The same refinance with a $15,000 lump sum applied at the outset.

Interest saved
$132,085
Months removed
124 months
Interest with the extra
$181,127

Keep paying what you paid before

The cleanest approach to a refinance is to keep the payment unchanged. The rate reduction then goes entirely to principal, the term collapses, and the total interest falls sharply.

It also removes the main risk of refinancing: that the lower payment quietly becomes the new normal and the extended term is never recovered. Setting the higher payment up as a standing instruction on day one is what makes it stick.

Where the extra money is best used

Redirecting a mortgage refinance saving into the mortgage is sensible when there is no higher-rate debt outstanding. Where there is - a card at 20%, a car loan at 9% - the same money removes considerably more interest there.

Compare the rates before defaulting to the mortgage. The largest balance is rarely the most expensive debt.

Methodology and assumptions

What this calculator does, and what it deliberately does not do.

  • The baseline payment amortises the balance over the stated term at the stated rate.
  • The lump sum is applied immediately; the monthly extra is applied to principal after interest each month.
  • The saving is the difference in total interest between the baseline and the accelerated schedule.
  • Results are estimates. Real quotes depend on credit, income, property, loan programme and lender pricing at the time of application.
  • Nothing you type is transmitted or stored - the calculation runs entirely inside your browser.

This calculator is provided for informational and educational purposes only. Results are estimates and may not reflect actual rates, fees, taxes, or market conditions.

This website is not a lender, a mortgage broker or a financial adviser. It does not originate loans, does not accept applications and does not forward your details to anyone.

Actual loan terms depend on credit history, income, the property, the loan programme and lender pricing at the time of application. Only a lender can tell you what you qualify for.

Frequently asked questions

Will overpaying reduce my payment?

On most loans no - the term shortens instead. Some lenders will recast the payment after a large lump sum if asked.

How do I know my monthly saving?

It is the difference between the old payment and the new one, which the refinance calculator reports directly.

Is overpaying better than investing?

Overpaying is a guaranteed return at the loan rate; investing is uncertain. The loan rate is the benchmark to compare against, and neither answer is universal.

Should extra payments be flagged as principal-only?

Yes where the lender allows it. Otherwise extra funds are sometimes held as a prepaid instalment, which saves no interest at all.

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