Mortgage Rates Dip: What an $800,000 Refinance Costs Now
Recent cuts by the Federal Reserve have led to a modest decrease in mortgage rates, offering potential savings for homeowners considering a refinance. For those with an $800,000 mortgage originally secured at higher rates earlier in the year, or even recently, refinancing could translate to hundreds of dollars in monthly savings.
The decision to refinance hinges on individual circumstances and a careful calculation of costs versus benefits. Here’s a breakdown of potential monthly payments on an $800,000 mortgage refinance at current average rates: a 30-year refinance at 6.50% results in a monthly principal and interest payment of $5,056.54, while a 15-year refinance at 5.83% carries a monthly payment of $6,677.60.
Though, refinancing isn’t free. Closing costs typically range from 2% to 5% of the loan amount, equating to $16,000 to $40,000 on an $800,000 refinance. To determine if refinancing is worthwhile, calculate your break-even point by dividing the total closing costs by your anticipated monthly savings.remaining in the home beyond this period would yield financial gains, while a shorter timeframe or potential future refinancing could result in a loss.
Compared to January 2025 and late 2024, today’s rates represent a reduction of a few hundred dollars per month on an $800,000 mortgage.While affordability remains a challenge, particularly in expensive housing markets, thes lower rates provide a welcome prospect for both prospective buyers and current homeowners. Shopping around for competitive rates and locking one in during the Fed’s current trajectory could save borrowers thousands over the life of their loan.
Edited by Matt Richardson.
