Use the remaining loan
The relevant comparison begins with today’s payoff balance, current payment, rate, and time remaining—not the original loan amount or original closing date.
Remaining-loan and replacement-loan analysis
Test whether refinancing improves cost—not only payment
Compare the loan you still owe with a replacement loan, including points, closing costs, cash out, financed fees, extra principal, break-even timing, and remaining balances at a shared horizon.
Plan with context
A refinance should improve the debt position, not merely lower the next payment.
Restarting the term can reduce required payment while extending interest exposure. This worksheet compares cash flow and balances together so the tradeoff remains visible.
Closing costs delay savings
Points, lender charges, title costs, appraisal, and payoff penalties must be recovered before monthly cash-flow savings become a net benefit.
A longer term can hide cost
Extending repayment may lower the payment while leaving a larger balance at the same future date. The equity-adjusted result accounts for that balance difference.
Cash out is new borrowing
Cash received increases the replacement principal and later interest. It is shown separately and is never counted as refinance savings.
Points need a holding period
Paying points for a lower rate is useful only if the loan remains in place long enough for the interest savings to exceed the upfront charge.
Qualification is separate
Property value, loan-to-value, credit, income, reserves, occupancy, loan type, and appraisal determine whether the modeled offer is actually available.
Included
Remaining loan amortization, replacement term and rate, points, closing costs, penalty, cash out, financed costs, extra principal, cash-flow break-even, balance adjustment, rate scenarios, charts, and schedule.
Not included
Escrow, taxes, mortgage insurance changes, property value, legal APR disclosures, adjustable rates, tax deductions, lender eligibility, or investment returns on monthly savings.
Use it well
Compare formal loan estimates, use the exact current payoff and payment, choose a realistic holding horizon, and examine both the payment and remaining balance.