Compare the monthly payment and total interest before and after refinancing (remortgaging), and compute the refinance cost, monthly savings, and break-even months.
Input Data
Results
At a glance:Refinancing replaces an existing loan with a new one; this calculator compares the two payment schedules and the cost to break even.
Formula
oldMonthlyPayment = balance × r_old·(1+r_old)^n_old / ((1+r_old)^n_old − 1)
newMonthlyPayment = balance × r_new·(1+r_new)^n_new / ((1+r_new)^n_new − 1)
monthlySavings = oldMonthlyPayment − newMonthlyPayment
refinanceCost = balance × originationFeePercent% + closingCosts
breakEvenMonths = refinanceCost / monthlySavings
$$\\text{Monthly payment} = P \\times \\dfrac{r(1+r)^n}{(1+r)^n - 1}$$How to Use
- Enter the current balance, old and new rates, and terms.
- Enter the origination fee and closing costs.
- Review the monthly savings, break-even months, and interest difference.
FAQ
Does a lower monthly payment always mean I save money?
Not necessarily. A lower payment usually comes from a lower interest rate or a longer term. If the term is stretched, total interest over the life of the loan may actually rise. Compare the total interest cost and the break-even point, not just the monthly figure.
Should I refinance just because rates dropped?
Compare the savings against the refinancing costs (legal fees, valuation, possible penalty). If the break-even period is shorter than the time you plan to keep the loan, refinancing is generally worthwhile. Use the Refinance Break-Even Calculator to check.
What costs are involved in refinancing a Hong Kong mortgage?
Typical costs include bank handling fees, legal fees, valuation fees, and a possible early-repayment penalty on the original loan if it is still within the penalty period. Some banks offer cash rebates that offset part of these costs.
How do cash rebates affect the decision?
Hong Kong banks often offer cash rebates (a percentage of the new loan) that can offset legal and other fees. However, there is usually a rebate lock-in period (commonly 2–3 years) during which early redemption requires refunding the rebate. Include this in your break-even analysis.
What is the difference between rate-and-term refinance and cash-out refinance?
Rate-and-term refinance changes the interest rate and/or the term without drawing extra cash, aiming to lower payments or total interest. Cash-out refinance takes out a larger new loan than the old balance and receives the difference in cash, which increases the loan amount and total interest but provides liquidity.
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.