I'm curious as to what the feeling of people in this thread is towards refinancing to increase monthly cash flow. I've got about 8 years left on my 15 year mortgage. If I refi to a new 15 year mortgage I estimate that I could reduce my payment by $800-$900 a month.

I would be kidding myself if I said that I would invest all of that savings as I know some portion would get spent. I think I could safely say that I would put $500 a month into an index fund.

Need more info to do the math. Your "refinance" option is the easiest to compute - I went with 7% expected return for 15 years on $6000 per year, and I get $150K or so. At the end of 15 years, you have a paid-off house and $150K.

The "don't refinance" option has more variables - you have a paid-off house at the end of 8 years, and then more to invest. How much is the P&I on the refinance? Will your additional spending be proportional, or is the $400 / month extra spending from lower house-payment fixed? Because in 8 years, you're freeing up more money, so what you expect you will do with that impacts this.

Example:

Your current P&I is $2200 / month. In 8 years, your spending goes up by $400 as it would today, leaving you $1800 to invest. So at the end of the 15 years you've got $186K plus your paid off house. In this case, you should do the refinance. $186K>$150K

Example 2:

Your current P&I is $2200 / month. In 8 years, your spending goes up by a little less than half of that amount - $1,000, leaving $1200 to invest. At the end of 15 years, you've got $124K plus your paid off house. In this case, you should not do the refinance. $124K<$150K

At very low market return assumptions, then not doing the refinance is the play, but you break-even with the "I'll spend about half of the amount I free up" earlier than you'd think - I'm getting that at about 3% assumed market returns. But it is quite a ways up on the return amount - market returns of 11-12% before refinance is clearly the play if it is more like "I"ll spend another $400 / month or so out of the freed up mortgage".

So if you know you will look at the increased cash-flow as an opportunity to increase spending as well as investing, then the answer is not nearly as clear cut as invest the difference only analysis. Which is something to think about - I think many more people do this than would readily admit, even in this community which is all about decoupling spending decisions from current income / cash-flow.