Refinance Term Comparison

The most consequential choice in a refinance is not the rate - it is the term. Resetting to a full thirty years lowers the payment the most and adds years of interest; matching the remaining term captures the rate saving without the extension.

This calculator compares the two directly, reporting which wins on total cost and which on monthly payment. They are almost never the same option.

Result

Cheaper overall

Offer B

Total difference

$89,006

Lower payment: Offer A
Option A payment: $1,590
Option B payment: $1,831
Payment difference: $241
Option A interest: $292,332
Option B interest: $203,326
Option A APR: 5.68%
Option B APR: 5.73%

A lower monthly payment and a lower total cost are often different offers. The comparison shows both so the trade-off is visible.

APR here folds the fees you entered into the borrowing cost. Lenders may include a different set of fees in their disclosed APR.

Offer comparison

Metric	Offer A	Offer B
Monthly payment	$1,589.81	$1,830.78
Term (months)	360	264
Total interest	$292,331.6	$203,325.92
Fees	$5,500	$5,500
Total cost	$577,831.6	$488,825.92
APR	5.6805%	5.7255%

How to use the refinance term comparison

Enter the balance and rate for the fresh-term option.
Enter the same balance and rate with the remaining term for the second option.
Enter the closing costs on each side.
Compare total cost and payment separately.

What people use this for

Deciding whether to reset the term on a refinance.
Comparing a fifteen-year refinance against a thirty-year one.
Quantifying what a term extension costs at the same rate.
Choosing between a lower payment and a lower total cost.

Worked examples

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

Fresh 30-year against remaining 22 years

$280,000 at 5.5% over 30 years against the same at 5.5% over 22 years, $5,500 of costs on each.

Cheaper overall: Offer B
Total difference: $89,006
Lower payment: Offer A

Fresh 30-year against a 15-year

The same balance with the shorter option at a lower rate.

Cheaper overall: Offer B
Payment difference: $617
Option B interest: $117,249

The same rate, two very different loans

The first example holds the rate constant and changes only the term. The payment difference is significant, and so is the total cost difference - eight extra years of interest on a balance that would otherwise have been shrinking.

Lenders default to the fresh long term because it produces the most attractive payment. Asking for a custom term matching the years remaining is straightforward and most lenders will do it.

Shorter terms usually price better too

Fifteen-year loans typically carry a lower rate than thirty-year ones, so the shorter option compounds two advantages: less time for interest to accrue and a lower rate while it does.

The obstacle is the payment, which is substantially higher. Where it is affordable the saving is large; where it is not, the longer term is the correct choice and the extra interest is what a manageable payment costs.

Methodology and assumptions

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

Payments use the standard amortising formula. Total cost is payment × months plus costs on each side.
APR figures fold each side’s costs into a rate for comparison at matching terms.
The comparison assumes both loans run their full stated term.
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

Can I get a custom term?

Most lenders will write a term matching the years remaining on request. It is rarely offered proactively because it produces a higher payment.

Does a shorter term always cost less?

In total interest, essentially always. Whether it is the right choice depends on whether the higher payment is comfortably affordable.

What if I refinance long and overpay?

That reproduces the shorter term with more flexibility, provided you actually make the overpayments. The risk is that the lower required payment quietly becomes the actual payment.

Should closing costs differ between the options?

Usually they are similar. Enter what each lender quoted - if one offers a credit, that changes the comparison.

Related calculators

More refinance tools on RefinanceCalculatorTools.

Browse all 4 tools →

Your numbers