What the Refinance Analysis Builder actually produces

CURRENT LOAN: $385,000 balance, 30-yr fixed at 6.75%, originated 2022, 27 years remaining, P&I $2,497/mo. No total-interest or total-of-payments figure for the current loan was supplied, so a full lifetime-cost comparison between the two loans cannot be produced — only the monthly payment difference and closing-cost recovery can be shown with confidence. PROPOSED LOAN (as computed): $385,000 principal, 5.875% fixed, 360 months, Monthly P&I $2,277, Total of payments over full term $819,872, Total interest over full term $434,872, Upfront closing costs $6,200, Total cost (payments + closing costs) $826,072. Note: the borrower-provided proposed P&I of $2,278 differs by $1 from the computed $2,277 — likely a rounding artifact; the $2,277 figure from the tested amortization calculator is used throughout this analysis for consistency. LTV (from supplied balance/value only): Current LTV = $385,000 / $540,000 = 71.30%. Proposed LTV = $385,000 / $540,000 = 71.30% (unchanged, since no cash-out is being taken and principal is not being increased to cover closing costs — closing costs are being paid out-of-pocket at closing per the figures given). If closing costs were instead rolled into the loan, the principal and LTV would both increase — confirm with the lender which method applies at closing. CASH-OUT ANALYSIS: Not applicable. The stated principal ($385,000) equals the current balance, and the borrower goal explicitly states no cash-out is needed. No additional cash-out proceeds are reflected in the computed figures above. ITEMS NOT REFLECTED IN THESE FIGURES (verify separately): Any change in escrow (property tax/insurance) reserves at closing, any PMI/MIP change (not applicable if LTV is under typical thresholds, but confirm loan type/program), title/recording fee itemization within the $6,200 estimate, and the current loan's exact remaining total-interest figure (not provided, so not included in this comparison).

Monthly P&I savings: $2,497 (current) − $2,277 (proposed, computed figure) = $220/month reduction. Closing costs: $6,200 (given, out-of-pocket, not financed into principal per the consistent scenario used here). Approximate break-even on closing costs: $6,200 ÷ $220/month ≈ 28.2 months (~2.3 years). This break-even figure is a simple derived calculation from the given monthly savings and closing cost figures — it is not one of the pre-computed 'tested calculator' outputs and should be confirmed against the actual Loan Estimate/Closing Disclosure before relying on it. Since the borrower plans to stay at least 7 more years (84 months), and the estimated break-even (~28 months) falls well within that horizon, the monthly savings would continue to accrue for roughly 56 additional months beyond break-even if the stated timeline holds — implying rough undiscounted savings of approximately 56 × $220 ≈ $12,320 beyond cost recovery, though this is a simplified projection, not the total-cost figures above, and does not account for opportunity cost, taxes, or the extended amortization discussed below. Important caveat: the proposed loan restarts a fresh 360-month term versus 27 years (324 months) remaining on the current loan. This extends the amortization schedule by roughly 3 years, which increases lifetime interest paid even at a lower rate — this cannot be fully quantified here because the current loan's total remaining interest was not supplied. This is a key factor to verify before finalizing a recommendation.

Directionally, refinancing appears to support the borrower's stated goal of a lower monthly payment: the computed figures show a $220/month reduction with a break-even on closing costs of approximately 28 months (estimate to confirm), well within the borrower's 7+ year stay horizon. This is a discussion point worth pursuing further, not a final suitability determination. However, before this can be treated as a firm recommendation, the following should be verified: (1) the current loan's remaining total interest/total-of-payments figure, to allow a true lifetime-cost comparison against the proposed loan's $826,072 total cost; (2) whether the new 360-month term (vs. 324 months remaining) meaningfully changes total interest paid over the borrower's actual expected stay and beyond; (3) confirmation of the finalized Closing Disclosure/APR, since APR was not provided and cannot be assumed; (4) escrow and any MI/PMI/MIP considerations, which are excluded from the figures above and could affect the effective payment change; (5) whether the borrower intends to pay closing costs out-of-pocket or finance them, since financing them would change principal and LTV from the 71.30% shown here. Subject to those verifications, the reduced payment and reasonable break-even window are consistent with the borrower's goals of payment relief with no cash-out, given a 7+ year stay. Final recommendation should be confirmed once the missing current-loan totals and closing disclosure details are available, and borrower acknowledgment of the extended-term tradeoff should be obtained and documented before proceeding.