Refinance scenario
Refinancing a $400,000 mortgage from 8.5% to 7.5%
Refinancing $400,000 from 8.5% to 7.5% on a 30-year term saves about $279 a month, and with closing costs of 2% ($8,000) you break even in 29 months.
| New term | New payment | Monthly savings | Lifetime interest difference | Break-even |
|---|---|---|---|---|
| 30-year | $2,797 | $279 | $100,367 less | 29 months |
| 20-year | $3,222 | −$147 (higher) | $333,866 less | n/a (payment rises) |
| 15-year | $3,708 | −$632 (higher) | $439,787 less | n/a (payment rises) |
Is it worth it?
A break-even of 29 months is moderate. It works if you're fairly confident you'll stay in the home and keep this loan for more than 3 years; if a move or another refinance is likely sooner, the costs may outweigh the savings. Lower closing costs would shorten it.
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
$2,797
At these numbers you break even in 29 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 8.5% to 7.5%?
- About $279 a month on a 30-year term, and $100,367 in lifetime interest compared with keeping the 8.5% loan for 30 years.
- How long until I break even?
- 29 months on a 30-year term, assuming closing costs of 2% of the loan ($8,000).
- What would a 15-year refinance at 7.5% cost?
- $3,708 a month, $632 more than the current $3,076 payment, with $439,787 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 7.5% 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.