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Latest RatesBest Church Rate:5.80%+
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Refinance savings calculator

Should your church refinance this loan?

Compare your current rate to a new rate and see monthly savings, total lifetime cost difference, and the exact month closing costs are recovered. Then decide.

Your current and new loan

Current loan
$1,500,000
Closing costs auto-adjust to 1.5% of balance; tune below if your lender quoted a different figure.
New loan
$22,500
Origination, appraisal, title, legal. Typical range: 1-3% of balance.

Break-even

16months
Clear win

Closing costs recovered in under 2 years. Most CFOs proceed if the financial picture is otherwise stable.

Current
$12,675/mo
7.50% · 18 yr left
New
$11,184/mo
6.50% · 20 yr term
Monthly savings
+$1,491
Lifetime savings
+$31K

Estimate only. Actual refi terms depend on lender, current giving and reserves, LTV at refi, and any prepayment penalties on the existing loan.

See what you'd actually qualify for

Payoff timeline overlay

Both loans' remaining balance plotted over time. Vertical marker shows the month closing costs are recovered. If the new curve sits below the current curve throughout, you're saving every month from day one; the question is just whether the total savings exceed closing costs.

$1.5M$1.1M$750K$375K$0Break-evenYear 0Year 10Year 20
Current loan balance
New loan balance
Closing costs recovered

Current vs. new, line by line

Every dimension that matters when deciding whether to refi.

CurrentNewΔ
Rate7.50%6.50%-1.00 pt
Term18 yr left20 yr+2 yr
Monthly payment$12,675$11,184−$1,491
Total interest$1.2M$1.2M−$54K
Total cost (incl. closing)$2.7M$2.7M−$31K
Break-even on closing costsn/a16 mo

When refinancing makes sense for a church

The refi math hinges on three numbers: how much your monthly payment drops, how much closing costs total, and how long you plan to keep the property. If monthly savings recoup closing costs in under 2 years and you intend to stay through the new term, the math almost always works. If break-even is 4+ years, you need to stress-test whether giving will hold up that long.

The rate gap that justifies a refi scales with balance. On a $5M loan, even a 0.5% drop saves about $25K/year, easily worth $20-30K of closing costs. On a $500K loan, the same 0.5% saves only $2.5K/year, so closing costs take a decade to recoup. The bigger the balance, the smaller the rate gap that pays off.

Extension funds vs. commercial banks

One of the most common refi paths in church finance is moving a bank loan to a denomination extension fund. AGFinancial, ECCU, Wesleyan Investment Foundation, and similar funds frequently offer 1-2 points lower than commercial banks for member churches. The catch: eligibility requires denomination affiliation and the extension fund will underwrite as if it were a new loan (DSCR, LTV, leadership profile, giving trend). Start the conversation early; closing timelines run 60-120 days.

The closing-cost gotchas
  • Prepayment penalty on the old loan. Bank loans often have a 1-3% penalty in years 1-5, or yield-maintenance on fixed-rate loans. Add it to closing costs before computing break-even.
  • New appraisal required. Lenders order their own, usually $3-8K for church property. The figure you used above (1.5% of balance) often covers it, but ask.
  • Title and legal at refi. Even on the same property, the new lender wants fresh title and lien work. Roughly $2-5K depending on state.
  • The "no-cost refi" usually isn't. Closing costs rolled into the new loan still get paid; they just hide in a slightly higher rate.

Frequently asked questions

What's a good break-even period for a church refinance?
Under 24 months is unambiguously good. 24-48 months is the standard range most CFOs accept. Above 48 months only makes sense if you are confident the church will keep the property and current giving levels through the full new term. Above 72 months, the math rarely works.
Do extension funds refinance bank loans?
Yes, this is one of the most common refi paths. Denomination extension funds (AGFinancial, ECCU, Wesleyan Investment Foundation, etc.) frequently refinance commercial bank loans for member churches, often at meaningfully lower rates. Eligibility depends on denomination affiliation and the underwriting profile.
Are there prepayment penalties on church loans?
Sometimes. Bank loans often include a 1-3% prepayment penalty in the first 3-5 years, or a yield-maintenance clause for fixed-rate loans. Extension funds and CDFIs are usually more flexible. Always read the prepayment clause before counting on a refi; the penalty can wipe out a year of savings.
Should we refinance if rates only dropped 0.5%?
It depends on the balance. On a $5M loan, 0.5% is roughly $25K/year of interest savings, easily worth $20K-30K of closing costs. On a $500K loan, the same 0.5% only saves ~$2.5K/year, so closing costs would take 8-12 years to recoup. The bigger the balance, the smaller the rate gap that justifies a refi.
Can we cash out (take more than we owe) on a refi?
Yes, in some cases. Cash-out refinancing on church property exists but is heavily underwritten. Lenders treat the new total against LTV (typically capped at 80%) and re-test DSCR on the larger payment. If you're cash-out-refinancing to fund a building project, run the LTV and DSCR calculators on the new balance first.

Refinancing is 1 piece of the picture

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