Refinancing $500,000 from 7.00% to 6.50%
Estimated monthly saving
$279
$3,439 → $3,160 · closing costs $11,500 · break-even 42 months
Monthly saving after refinancing
$279
$3,439 → $3,160 per month (principal & interest)
Closing costs$11,500
Break-even42 months
Interest left on current loan$614,260
Interest on new loan$637,722
Net result over 7 years+$11,914
Refinancing looks worthwhile here: you recover the $11,500 of closing costs in about 42 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% | $360 | 32 mo | Worth it |
| 6.50% | $279 | 42 mo | Worth it |
| 6.75% | $196 | 59 mo | Marginal |
| 7.00% | $113 | 103 mo | Marginal |
Choosing the new term
| New term | New P&I | Monthly change | Total interest |
|---|---|---|---|
| 15 years | $4,356 | +$916 | $283,997 |
| 20 years | $3,728 | +$289 | $394,688 |
| 30 years | $3,160 | −$279 | $637,722 |
FAQ
Is it worth refinancing $500,000 from 7.00% to 6.50%?
Yes by the usual test: the monthly payment drops about $279, closing costs are roughly $11,500, and you break even in about 42 months. Over 7 years the net gain is about $11,914.
How much interest does refinancing save?
Your current loan has about $614,260 of interest left. The new 30-year loan carries about $637,722. On a pure interest basis the difference is $23,462 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 $82 per month in savings on this balance, which shortens the break-even window.