Refinancing $200,000 from 7.50% to 6.50%
Estimated monthly saving
$177
$1,441 → $1,264 · closing costs $5,500 · break-even 32 months
Monthly saving after refinancing
$177
$1,441 → $1,264 per month (principal & interest)
Closing costs$5,500
Break-even32 months
Interest left on current loan$267,036
Interest on new loan$255,089
Net result over 7 years+$9,396
Refinancing looks worthwhile here: you recover the $5,500 of closing costs in about 32 months (rule of thumb: under 48 months).
Rate drop: 1.00%. Figures exclude escrow changes and any discount points.
What happens at nearby new rates
| New rate | Monthly saving | Break-even | Verdict |
|---|---|---|---|
| 6.25% | $210 | 27 mo | Worth it |
| 6.50% | $177 | 32 mo | Worth it |
| 6.75% | $144 | 39 mo | Worth it |
| 7.00% | $111 | 50 mo | Marginal |
Choosing the new term
| New term | New P&I | Monthly change | Total interest |
|---|---|---|---|
| 15 years | $1,742 | +$301 | $113,599 |
| 20 years | $1,491 | +$50 | $157,875 |
| 30 years | $1,264 | −$177 | $255,089 |
FAQ
Is it worth refinancing $200,000 from 7.50% to 6.50%?
Yes by the usual test: the monthly payment drops about $177, closing costs are roughly $5,500, and you break even in about 32 months. Over 7 years the net gain is about $9,396.
How much interest does refinancing save?
Your current loan has about $267,036 of interest left. The new 30-year loan carries about $255,089. On a pure interest basis the difference is $11,947 saved — 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.