Refinancing $400,000 from 7.00% to 6.50%
Estimated monthly saving
$223
$2,751 → $2,528 · closing costs $9,500 · break-even 43 months
Monthly saving after refinancing
$223
$2,751 → $2,528 per month (principal & interest)
Closing costs$9,500
Break-even43 months
Interest left on current loan$491,408
Interest on new loan$510,178
Net result over 7 years+$9,231
Refinancing looks worthwhile here: you recover the $9,500 of closing costs in about 43 months (rule of thumb: under 48 months).
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% | $288 | 33 mo | Worth it |
| 6.50% | $223 | 43 mo | Worth it |
| 6.75% | $157 | 61 mo | Marginal |
| 7.00% | $90 | 106 mo | Marginal |
Choosing the new term
| New term | New P&I | Monthly change | Total interest |
|---|---|---|---|
| 15 years | $3,484 | +$733 | $227,197 |
| 20 years | $2,982 | +$231 | $315,750 |
| 30 years | $2,528 | −$223 | $510,178 |
FAQ
Is it worth refinancing $400,000 from 7.00% to 6.50%?
Yes by the usual test: the monthly payment drops about $223, closing costs are roughly $9,500, and you break even in about 43 months. Over 7 years the net gain is about $9,231.
How much interest does refinancing save?
Your current loan has about $491,408 of interest left. The new 30-year loan carries about $510,178. On a pure interest basis the difference is $18,770 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 $65 per month in savings on this balance, which shortens the break-even window.