Suppose that 10 years ago you bought a home for $120,000, paying 10% as a down payment, and financing the rest at 7% interest for 30 years.

Your existing mortgage(the one you got 10 years ago)

Refinancing Since interest rates have dropped, you consider refinancing your mortgage at a lower 6% rate. If you took out a new 30 year mortgage at 6% for your remaining loan balance, what would your new monthly payments be?

How much interest will you pay over the life of the new loan?

Notice that if you refinance, you are going to be making payments on your home for another 30 years. In addition to the 10 years you've already been paying, that's 40 years total. How much will you save each month because of the lower monthly payment?

How much total interest will you be paying (consider the interest you paid over the first 10 years of your original loan as well as interest on your refinanced loan)