Refinancing $200,000 from 7.00% to 6.50%
Estimated monthly saving
$111
$1,376 → $1,264 · closing costs $5,500 · break-even 50 months
Monthly saving after refinancing
$111
$1,376 → $1,264 per month (principal & interest)
Closing costs$5,500
Break-even50 months
Interest left on current loan$245,704
Interest on new loan$255,089
Net result over 7 years+$3,865
Refinancing does not pay off within a reasonable window at these numbers (break-even 50 months). Try a bigger rate drop or lower closing costs.
Rate drop: 0.50%. Figures exclude escrow changes and any discount points.
What happens at nearby new rates
| New rate | Monthly saving | Break-even | Verdict |
|---|---|---|---|
| 6.25% | $144 | 39 mo | Worth it |
| 6.50% | $111 | 50 mo | Marginal |
| 6.75% | $78 | 71 mo | Marginal |
| 7.00% | $45 | 123 mo | Marginal |
Choosing the new term
| New term | New P&I | Monthly change | Total interest |
|---|---|---|---|
| 15 years | $1,742 | +$367 | $113,599 |
| 20 years | $1,491 | +$116 | $157,875 |
| 30 years | $1,264 | −$111 | $255,089 |
FAQ
Is it worth refinancing $200,000 from 7.00% to 6.50%?
At these numbers it is marginal: the saving is $111 per month against about $5,500 of closing costs, so break-even is 50 months. Over 7 years the net result is $3,865.
How much interest does refinancing save?
Your current loan has about $245,704 of interest left. The new 30-year loan carries about $255,089. On a pure interest basis the difference is $9,385 more — remember the new loan also restarts the term.
What if rates drop further?
Every extra 0.25% lower on the new rate adds roughly $33 per month in savings on this balance, which shortens the break-even window.