Refinance Savings Calculator
Compare your current loan terms against proposed refinancing to quantify potential savings.
Compare your existing loan against a proposed refinancing to see the change in debt service, any cash-out proceeds, and how long it takes to recover closing costs. Useful whether you are refinancing opportunistically or facing a maturity.
Current Loan
New Loan
Costs
As a percentage of the loan balance
The formula
Monthly saving = current payment - new payment Break-even months = closing costs / monthly saving
What to watch
- Break-even only matters if you will hold past it. On a two-year remaining hold, a thirty-month break-even is a cost, not a saving.
- Include everything in closing costs: origination, legal, title, appraisal, environmental, and any prepayment penalty, defeasance cost, or yield maintenance on the existing loan. Defeasance in particular can dominate the analysis.
- Cash-out proceeds are constrained by the same three tests as any new loan — coverage, debt yield, and loan-to-value — so the amount you can take out may be well below what the rate differential suggests.
- If you are refinancing into a maturity, start twelve to eighteen months out. The option set narrows sharply inside ninety days.
Frequently asked questions
Is it worth refinancing for a small rate improvement?
It depends on loan size, remaining hold, and total transaction costs including any prepayment penalty or defeasance. On a large balance a modest rate improvement can produce meaningful savings; on a small balance with high exit costs it frequently does not clear break-even within the hold.
How much cash can I take out in a refinance?
The new loan is sized by the lowest of debt service coverage, debt yield, and loan-to-value against current NOI and current valuation. Cash-out is whatever that proceeds figure exceeds your existing balance and costs — often less than a rate comparison alone implies.
What is defeasance and why does it matter here?
Defeasance is a prepayment mechanism common in securitised loans, requiring the borrower to substitute a portfolio of securities for the property as collateral rather than simply paying a penalty. The cost depends on rates at the time and can be substantial enough to change the refinancing decision entirely, so establish it early.
Go deeper
Your Loan Matures Next Year: The Five Options, Ranked by When to Start
A large share of commercial real estate debt reaches maturity across 2026 and 2027. Refinance, extend, recapitalise, sell, or restructure — the option set narrows the longer you wait.
Read the articleThis calculator produces estimates from the assumptions you enter. It is not investment, tax, or legal advice, and actual lender terms, pricing, and outcomes will differ. Confirm anything you intend to rely on with advisers engaged on your specific facts.
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