Refinancing Benefit Calculator
Quantify the NPV benefit of refinancing existing project debt
Loan Parameters
Enter current and proposed loan terms
Typical: 120bps margin, 15yr tenor
Current Loan
New Loan
Market range: 100-140bps
Assumptions
Annual Savings
+€600k
per year
Prepayment Cost
-€2.0M
one-time
NPV Benefit
+€3.0M
net present value
Break-even
3.3 yrs
to recover costs
Refinancing Recommended
Refinancing makes sense if penalty < 5.03%
Margin reduction: 60bps
Annual Cash Flow Comparison
Interest payments under current vs. new terms
Year-by-Year Analysis
| Year | Current Interest | New Interest | Annual Savings | Cumulative | PV Savings |
|---|---|---|---|---|---|
| 0 | - | - | -€2,000,000 | -€2,000,000 | -€2,000,000 |
| 1 | €5,300,000 | €4,700,000 | +€600,000 | €-1,400,000 | €566,038 |
| 2 | €5,300,000 | €4,700,000 | +€600,000 | €-800,000 | €533,998 |
| 3 | €5,300,000 | €4,700,000 | +€600,000 | €-200,000 | €503,772 |
| 4 | €5,300,000 | €4,700,000 | +€600,000 | +€400,000 | €475,256 |
| 5 | €5,300,000 | €4,700,000 | +€600,000 | +€1,000,000 | €448,355 |
| 6 | €5,300,000 | €4,700,000 | +€600,000 | +€1,600,000 | €422,976 |
| 7 | €5,300,000 | €4,700,000 | +€600,000 | +€2,200,000 | €399,034 |
| 8 | €5,300,000 | €4,700,000 | +€600,000 | +€2,800,000 | €376,447 |
| 9 | €5,300,000 | €4,700,000 | +€600,000 | +€3,400,000 | €355,139 |
| 10 | €5,300,000 | €4,700,000 | +€600,000 | +€4,000,000 | €335,037 |
| 11 | €5,300,000 | €4,700,000 | +€600,000 | +€4,600,000 | €316,073 |
| 12 | €5,300,000 | €4,700,000 | +€600,000 | +€5,200,000 | €298,182 |
| Total | €63,600,000 | €56,400,000 | +€7,200,000 | - | NPV: +€3,030,306 |
Methodology Notes
- • NPV calculated using 6% discount rate
- • Analysis uses interest-only comparison for clarity
- • Break-even assumes constant annual savings
- • Max acceptable penalty = PV of savings ÷ outstanding debt
- • Consider transaction costs and relationship value in final decision