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Loan Refinance Calculator

Enter your loan balance, current rate and remaining tenure, the new offer, and the total refinancing costs. You will see whether it is worth it and how many months to break even.

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Enter the total of all costs such as legal fees, valuation and stamp duty. Some loans also have a lock-in penalty.

This result is an estimate only. Check with your bank or the relevant authority before making decisions.

How it is calculated

Both instalments use the reducing-balance method on the same loan balance:

  1. Current instalment = reducing-balance instalment at the current rate and remaining tenure
  2. New instalment = reducing-balance instalment at the new rate and tenure
  3. Monthly saving = current instalment − new instalment
  4. Total saving = (current instalment × remaining months) − (new instalment × new months) − costs
  5. Months to break even = costs ÷ monthly saving, rounded up

The verdict is “worth it” when the total saving is above zero. A shorter new tenure can raise the monthly instalment while still saving interest overall. Months to break even is shown only when the monthly instalment drops; otherwise it is 0.

Worked example

Balance RM300,000, current rate 4.5% with 25 years left, new offer 3.9% over 25 years, costs RM5,000:

  1. Current instalment: RM1,667.50
  2. New instalment: RM1,566.99
  3. Monthly saving: RM100.50
  4. Total saving: RM500,249.23 − RM470,097.88 − RM5,000 = RM25,151.35
  5. Break even: RM5,000 ÷ RM100.50 = 50 months

If the new rate were 5%, the new instalment would be higher than the current one and the total saving negative, so the verdict is not worth it.

Why your number may differ

You enter one total costs figure, so accuracy depends on your estimate. Any lock-in penalty is not counted unless you include it in the costs.

Frequently asked questions

What are refinancing costs?

Costs usually include legal fees, valuation and stamp duty, and some loans have a lock-in penalty. You enter a single total costs figure above.

How does the calculator decide if it is worth it?

It compares the total of all instalments on your current loan with the total on the new loan, then subtracts the costs. If the result is positive, it counts as worth it.

What does months to break even mean?

It is the costs divided by the monthly saving, rounded up. After that many months, the monthly saving has covered what you paid to switch.

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