When a boat refinance works
If rates have fallen or your circumstances have improved, a new lender may offer a lower rate on the outstanding balance. The saving is the interest difference less any settlement charge or fees.
It usually makes sense when the rate falls by at least 1 to 2 points and enough term remains for the saving to cover the costs.
Worked example
A £45,000 balance at 9.5% with 96 months left costs £661.83 a month. Refinancing at 7.9% over 96 months cuts the payment to £627.67.
Interest falls from £18,535.31 to £15,255.96. After £500 of costs, the net saving is £3,179.35 and the switch breaks even in 3 months.
Watch the term
Stretching the new loan over a longer term lowers the payment but can raise total interest, wiping out the benefit of the lower rate.
Ask the existing lender for a settlement quote valid on the day of transfer.
Inputs for the boat loan refinance calculator
Balance outstanding
What you still owe on the current boat loan.
Current rate
The rate on the existing agreement.
Payments left
How many monthly payments remain.
New rate
The rate offered by the new lender.
New term
How long the new loan will run.
Switching costs
Settlement charge, arrangement fee or other costs of moving the loan.
CALCULATOR QUESTIONS
Boat loan refinance calculator questions
How much can a boat refinance save?
In the example, £3,179.35 net after £500 of costs, with a 3-month break-even.
Does a longer term help?
It lowers the payment but usually raises total interest. Compare totals, not just payments.
Can I refinance with a balloon outstanding?
Sometimes, but the balloon must be settled or carried into the new agreement.
Will it affect my credit score?
A hard search can lower it briefly, but a cleared loan and on-time payments usually help over time.