refi confirmation

[Bradfurd]

I have $178K remaining on my current mortgage. Paying an extra $100 on principal every month, so total P+I is about $1125. Expected payoff date is November 2038. The rate is 3.5%. This was originally a 30yr mortgage executed in 2013. Home value is around $300K, maybe $315K.

My credit union is offering a 15 year at 2.375% with $2k closing costs. P+I payment would be the same as my current mortgage.

Is this a no brainer? Should I refi?

[Papa bear]

I have $178K remaining on my current mortgage. Paying an extra $100 on principal every month, so total P+I is about $1125. Expected payoff date is November 2038. The rate is 3.5%. This was originally a 30yr mortgage executed in 2013. Home value is around $300K, maybe $315K.

My credit union is offering a 15 year at 2.375% with $2k closing costs. P+I payment would be the same as my current mortgage.

Is this a no brainer? Should I refi?

Do you plan on living there for 5+ more years?  If yes, then refinance.  3-5 years? Probably a take it or leave it.  If you plan on selling in under 3 years, skip paying those closing costs and stay your current course.

No math was done to confirm, just rule of thumb type numbers.

Edited a 5 to 3 because typo. Woops.


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[RWD]

You will recoup the closing costs in just over a year. Seems worthwhile. If you're planning on keeping this house "forever" you may also want to consider refi-ing to another 30 year mortgage with a slightly higher rate for the lower payments and invest the difference. Personally I like getting the lowest interest rate possible so I would go for the 15-year re-fi.