I’ve run into that exact dilemma a few times. The closing costs on a refi can sneak up on you—last time I looked into it, the fees were almost $6k, and that’s before you even start seeing the lower rate benefits. If you’re not planning to stay put for at least 5-7 years, it’s tough to justify. I’ve seen folks get excited about shaving a percent off their rate, but then they move three years later and barely break even, if that.
Honestly, I’m a bit skeptical about the “refi to a shorter term” route unless you’re dead set on staying long-term. Paying extra each month gives you flexibility—if something comes up, you can always dial it back. With a shorter term, you’re locked in, and banks love that. I get the structure argument, but sometimes life throws curveballs and that rigid payment can be a headache. Just my two cents from seeing deals go sideways when people overcommit.
Paying extra each month gives you flexibility—if something comes up, you can always dial it back. With a shorter term, you’re locked in, and banks love that.
This is exactly why I’ve always leaned toward just tossing extra at the principal when I can. Life’s unpredictable—last year my car decided it wanted to retire early, and there went my “extra payment” money for a while. But hey, at least I wasn’t stuck with a bigger monthly bill. Also, those refi closing costs are wild... I swear lenders have a fee for everything short of breathing. Has anyone actually seen a “no closing cost” refi work out in their favor? Feels like the unicorn of mortgages.
