Refinance scenario
Refinancing a $400,000 mortgage from 7% to 6.5%
Refinancing $400,000 from 7% to 6.5% on a 30-year term saves about $133 a month, and with closing costs of 2% ($8,000) you break even in 61 months.
| New term | New payment | Monthly savings | Lifetime interest difference | Break-even |
|---|---|---|---|---|
| 30-year | $2,528 | $133 | $47,858 less | 61 months |
| 20-year | $2,982 | −$321 (higher) | $242,285 less | n/a (payment rises) |
| 15-year | $3,484 | −$823 (higher) | $330,838 less | n/a (payment rises) |
Is it worth it?
A break-even of 61 months is long. You'd need to keep the loan more than 6 years to come out ahead, so this refinance makes sense mainly if you're settled long-term or can get closing costs well below 2%.
Shorter terms raise the payment but cut lifetime interest sharply. Want the background? Read is it worth refinancing for 1%, or check your own costs with the break-even calculator.
New monthly payment
$2,528
At these numbers you break even in 61 months.
Takes ~60 seconds. No credit check.
Estimates only. Default rates are Freddie Mac PMMS weekly averages — a national purchase-mortgage benchmark, not a local refinance quote. Payments are principal and interest only. reficalculator.com is not a lender or broker; see how we calculate.
Nearby balances
Other rate changes on $400,000
Frequently asked questions
- How much will I save refinancing $400,000 from 7% to 6.5%?
- About $133 a month on a 30-year term, and $47,858 in lifetime interest compared with keeping the 7% loan for 30 years.
- How long until I break even?
- 61 months on a 30-year term, assuming closing costs of 2% of the loan ($8,000).
- What would a 15-year refinance at 6.5% cost?
- $3,484 a month, $823 more than the current $2,661 payment, with $330,838 less lifetime interest.
- What assumptions do these numbers use?
- Principal and interest only, a current loan with 30 years remaining, and 2% closing costs paid separately. Taxes, insurance and mortgage insurance are excluded.
- Can I get 6.5% today?
- Rates depend on your credit, equity, loan type and lender. This page shows the math for that rate; it is not a quote. reficalculator.com is not a lender.