Refinancing $400,000 from 7.50% to 7.00%
Estimated monthly saving
$222
$2,883 → $2,661 · closing costs $9,500 · break-even 43 months
Monthly saving after refinancing
$222
$2,883 → $2,661 per month (principal & interest)
Closing costs$9,500
Break-even43 months
Interest left on current loan$534,071
Interest on new loan$558,036
Net result over 7 years+$9,125
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 |
|---|---|---|---|
| 6.75% | $289 | 33 mo | Worth it |
| 7.00% | $222 | 43 mo | Worth it |
| 7.25% | $154 | 62 mo | Marginal |
| 7.50% | $86 | 111 mo | Marginal |
Choosing the new term
| New term | New P&I | Monthly change | Total interest |
|---|---|---|---|
| 15 years | $3,595 | +$712 | $247,156 |
| 20 years | $3,101 | +$218 | $344,287 |
| 30 years | $2,661 | −$222 | $558,036 |
FAQ
Is it worth refinancing $400,000 from 7.50% to 7.00%?
Yes by the usual test: the monthly payment drops about $222, closing costs are roughly $9,500, and you break even in about 43 months. Over 7 years the net gain is about $9,125.
How much interest does refinancing save?
Your current loan has about $534,071 of interest left. The new 30-year loan carries about $558,036. On a pure interest basis the difference is $23,965 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 $67 per month in savings on this balance, which shortens the break-even window.