Refinancing $500,000 from 7.50% to 7.00%
Estimated monthly saving
$277
$3,604 → $3,327 · closing costs $11,500 · break-even 42 months
Monthly saving after refinancing
$277
$3,604 → $3,327 per month (principal & interest)
Closing costs$11,500
Break-even42 months
Interest left on current loan$667,589
Interest on new loan$697,544
Net result over 7 years+$11,781
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 |
|---|---|---|---|
| 6.75% | $361 | 32 mo | Worth it |
| 7.00% | $277 | 42 mo | Worth it |
| 7.25% | $193 | 60 mo | Marginal |
| 7.50% | $108 | 107 mo | Marginal |
Choosing the new term
| New term | New P&I | Monthly change | Total interest |
|---|---|---|---|
| 15 years | $4,494 | +$890 | $308,945 |
| 20 years | $3,876 | +$273 | $430,359 |
| 30 years | $3,327 | −$277 | $697,544 |
FAQ
Is it worth refinancing $500,000 from 7.50% to 7.00%?
Yes by the usual test: the monthly payment drops about $277, closing costs are roughly $11,500, and you break even in about 42 months. Over 7 years the net gain is about $11,781.
How much interest does refinancing save?
Your current loan has about $667,589 of interest left. The new 30-year loan carries about $697,544. On a pure interest basis the difference is $29,956 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 $84 per month in savings on this balance, which shortens the break-even window.