Refinancing again?

How long are you going to keep the mortgaged property?

Stuff happens and if you have to bail after a year or two, you'll feel dumb.

If you know that you'll be there forever (barring something extraordinary), then go for it.

Then after month 52 you'll have extra Beermoney.

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Using some calculator online seems to indicate that'd save 30k over the life of the loan with a break even point of 52 months.

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What went into this calculator?

Are you factoring in equity gained? What about payments, equal or unequal? What about the cost of refinancing (note to exclude cost of pre-paids/escrow)?

The primary factor on whether it’s a “good” decision or not is the cost of the Refi and the time you anticipate being in the house.

Have you broken even from the last refi? I'm in a similar situation, but I'm sticking with 3.375 for this reason.

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Really about all I look at is how long will it take me to recoup my closing costs. If it's only a couple years then why not.

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Absolutely, you get more flexibility with a lower note and can get your money back in short time. It's a no brainer.

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That being said, if I was you I'd do the new loan for 20 years, that coupled with the lower rate is where you will save interest cost.

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Me personally, I don't understand this route. You are handcuffing yourself to a higher minimum payment in the long run. I think the flexibility of a much lower note and being able to add more to principal if you can is a much safer route in case shite happens.

30 year note at 1500 a month vs 20 year note at 1900 a month is a big difference in cash flow flexibility for a middle class family. If you get a nice raise, then hey, put an extra 400 a month towards your note. If you lose your job, then hey, it's only 1500 a month minimum to cover.

52 month breakeven seems ridiculously long (origination fee? Title?). Suppose that factors last year's refi + this year's refi loan costs.

For your comparison:

Just looking at "Loan costs" (eg, origination, title, credit report, flood zone cert, etc.) vs. monthly savings, my breakeven was 7 months.

My sister is in process now, moving from 30yr to 20yr, and her breakeven is 30 months (less monthly savings for term difference is reason for length of time to breakeven)

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Refinancing over that little of a rate change is absolutely not worth it in my opinion. If this is your forever home then I would say possibly. Otherwise just make extra payments towards principal if you are worried about interest.

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Wah?

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It’s incredible how often this kind of sunk cost fallacy impacts otherwise prudent financial decisions.

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Totally agree

And why finance should be taught with much more balance, financial math of course and psychology.

What the financial says do and what the person's decision making experience while doing it...may be world's apart.

Case in point, sunk cost fallacy

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So I refinanced last year at 3.375% for 30 years. Today I can get 2.75% for 30 years. Using some calculator online seems to indicate that'd save 30k over the life of the loan with a break even point of 52 months. Is this generally where it would be advisable to refinance?

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Too small a rate change IMO, break even takes forever. Unless you have zero doubt this is your home for over 5+ years it makes zero sense to do this. If there is any possibility you might move in next 5 years, it's a really bad idea.

When we went from a 30 year 4.25% to a 15 year 2.375% last year our breakeven was just 13 months for comparison.

Starting August 1st, the 50 bps hit on refinances will be removed. If you were quoted in the last 2 months, the rate is likely to be a lot lower on August 1st.