Refinancing $500,000 from 7.00% to 7.50%
Change in monthly payment
$57
$3,439 → $3,496 · closing costs $11,500 · break-even never
Monthly change
$57
$3,439 → $3,496 per month (principal & interest)
Closing costs$11,500
Break-evenNever
Interest left on current loan$614,260
Interest on new loan$758,586
Net result over 7 years−$16,288
Refinancing does not pay off within a reasonable window at these numbers (break-even never). 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 |
|---|---|---|---|
| 7.25% | $28 | 408 mo | Marginal |
| 7.50% | -$57 | — | Marginal |
| 7.75% | -$143 | — | Marginal |
| 8.00% | -$230 | — | Marginal |
Choosing the new term
| New term | New P&I | Monthly change | Total interest |
|---|---|---|---|
| 15 years | $4,635 | +$1,196 | $334,311 |
| 20 years | $4,028 | +$589 | $466,712 |
| 30 years | $3,496 | +$57 | $758,586 |
FAQ
Is it worth refinancing $500,000 from 7.00% to 7.50%?
At these numbers it is marginal: the saving is -$57 per month against about $11,500 of closing costs, so break-even is never. Over 7 years the net result is -$16,288.
How much interest does refinancing save?
Your current loan has about $614,260 of interest left. The new 30-year loan carries about $758,586. On a pure interest basis the difference is $144,326 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 $85 per month in savings on this balance, which shortens the break-even window.