Is it worth refinancing from 7% to 6%?

Refinancing your home loan from 7% to 6% may seem like a minor achievement, but it can save you thousands of dollars in interest charges over the life of your loan. For example, reducing the annual percentage rate (APR) from 7% to 6% on a $400,000 dollar house reduces your interest payments as follows:

• 10-year fixed-rate loan: about $24,400 less in total interest.
• 15-year fixed-rate loan: about $39,600 less in total interest.
• 20-year fixed-rate loan: about $56,500 less in total interest.
• 30-year fixed-rate loan: about $94,700 less in total interest.

That’s a lot of money back in your pocket. Whether you consider this worth it also depends on how much you will pay in closing costs and other charges,  how long you plan to stay in your home, and how affordable your new monthly payment amount will be.