Staying put versus refinancing, with the break-even on fees.
Monthly saving
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Current payment
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New payment
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Break-even
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Your breakdown
Updates live as you type
Item
Amount
Worked example
Say you owe 2,500,000 pesos on a housing loan at 9% with 15 years left, and a bank offers to refinance the
same balance at 6.5% over a fresh 15-year term, with 80,000 in fees. The current payment is about 25,357 a
month and the new one about 21,778, a monthly saving of roughly 3,579. Dividing the 80,000 of fees by that
saving gives a break-even of 23 months: stay in the loan past that point and the move pays off. Total
interest falls from about 2,064,200 on the old loan to about 1,499,983 on the new one once the fees are
included, a meaningful cut because the new rate is well below the old one and the term was not extended.
Item
Current
Refinanced
Rate
9%
6.5%
Monthly payment
₱25,357
₱21,778
Total interest (incl fees)
₱2,064,200
₱1,499,983
Monthly saving / break-even
₱3,579 saved, 23 months
How it is calculated
Refinancing, also called a balance transfer, replaces your current loan with a new one on the same
outstanding balance. The calculator amortizes the balance twice, once at the old rate over the years
remaining and once at the new rate over the new term, using the standard annuity formula for each. The
difference between the two payments is the monthly saving. Dividing your upfront fees by that saving gives
the break-even in months, the point at which cumulative savings have repaid the cost of switching. It also
totals the interest each way, adding the fees to the refinanced figure so the comparison is fair. Two
cautions: extending the term can lower the payment while raising lifetime interest, and the fee figure
should include the new documentary stamp tax, appraisal, and any pre-termination charge on the old loan.
If the new payment is not lower, refinancing only adds cost and the tool says so.
Frequently asked questions
Is it worth refinancing a home loan in the Philippines?
Refinancing, or a balance transfer, can lower the monthly payment when the new rate is well below the old one. The trade-off is the cost: processing fees, a new documentary stamp tax, appraisal, and any pre-termination charge on the old loan. Divide those fees by the monthly saving to get the break-even in months. If you will keep the loan past the break-even point, refinancing usually pays off.
What fees are typically involved in refinancing a Philippine housing loan?
Common refinancing costs include a processing or application fee charged by the new lender, a new documentary stamp tax of 0.375 percent of the loan amount on a mortgage contract, a property appraisal fee, title insurance or mortgage redemption insurance premiums, and a pre-termination or penalty fee on the existing loan which can be 1 to 3 percent of the outstanding balance. These should all be included in the fees field of this calculator to get an accurate break-even figure.
How does extending the loan term affect the total interest when refinancing?
Extending the term lowers the monthly payment but typically raises the total interest paid over the life of the loan, even at a lower rate. For example, refinancing a 15-year balance into a fresh 20-year term at a lower rate may reduce the monthly payment substantially but cost more in cumulative interest than staying on the original schedule. This calculator shows total interest for both paths including refinancing fees so you can compare the true cost, not just the monthly figure.
What is the difference between a fixed-rate and a variable-rate Philippine housing loan?
Philippine housing loans typically offer a fixed rate for an initial period of one, three, five, or ten years, after which the rate is repriced based on the prevailing market benchmark. A purely fixed loan locks the rate for the full term and is less common. When a fixed period expires, many borrowers evaluate refinancing to reset to a competitive rate rather than accepting the lender's repriced rate. This calculator models a single fixed rate for the remaining term and does not project future repricing.