Heard back from the mortgage guy with 2.75% at fifteen years.

Current mortgage, to recap:

Began 10/09 for $120,000 @ 4.99%. 30 year fixed.

We always paid extra so we're currently sitting at about ~$92,000 remaining principle.

Monthly payment owed is $643, I think we've been paying ~$250 extra to the principle each month lately but that has varied over time.

Remaining interest we'd be paying if we stuck with this loan, including extra principle payments: $35,489.55

Potential new fifteen year mortgage:

Adding an estimated 5% in fees, $92,000+$4,600 = $96,600 loan value

Estimated interest rate is 2.75%, 15 year fixed.

Monthly payment owed looks like it'll be $655.55 according to the Excel loan calculator.

Extra payments would be $238/month

Total interest we'd be paying

*without* extra payments: $21,398.73

Total interest we'd be paying

*with* extra payments: $14,529.16

[interest already paid on current loan]$35,849.55 + [interest to be paid on future loan]$14,529.16 = $50,378.71

[total interest on current loan for the full 30 years] $56,031.97

Step#1: Add up all of the costs of the Refinance (Say $2500...?)

My estimate of the costs for the refi are the number the guy said off the top of his head as "they could go as high as" so this is another thing that will need to be firmed up when I move forward with the paperwork. For now I'm just using it as a placeholder.

Step #2: Calculate your break even point (at what point in time will your interest savings equals the costs of the refinance). 4.99-3.625=1.3625% times 92,000 equals roughly $1253 per year or $105 per month. If the costs are $4600 (seems high... I am thinking it should be more like $2500...?), your break even is ROUGHLY 4 years (at $2500 it's more like 2 years).... A more precise way is compare your current amortization table to a new amortization table you create and compare the two. Your loan broker should be able to do this for you.

4.99%-2.75%= 2.24%

2.24%*$92,000=$2,060.80

$2,060.80/180 months = $11.45 per month?

You lost me after that with the numbers, and I can certainly bug the loan broker like you said, but it looks like the jist of it is that we wouldn't need to be here that much longer at all to justify the 15 year mortgage.