I’ve got 13 yrs 4 months left to pay on my existing 5.5% 15 yr fixed mortgage, about $210K. Figuring $3K in fees, re-financing at 4.25% will save me $21.4K if I keep my payments the same. I’ll pay the loan off in 12 yrs 3 months. That $21.4K is all interest, of course. So, Uncle Sam takes about 30% of my savings in taxes. He’s gonna need it.

I’ve become WAY too interested in what’s happening with 10 year Treasuries. Two weeks ago they hit a yield of 3.5%, and this past week they hit 3.15%. All the while the rates have been stuck at 4.25%, though fees have lowered. I guess the 10 yr treas is too volitile to affect the mortgage rates, or the banks have just locked elbows and they are holding at 4.25%

My loan is $210K, so 0.25% equals $4,500 in interest over the 12.5 year payback period.

Rates are being kept low by the Fed’s buying program for MBS. That was just extended but ends in March. Economic fundamentals of a government running deficits and printing money (a necessary thing, IMHO) will combine with the end of the Fed buying MBS’s to push up rates. I think current rates, and rates for the next 45-75 days, are probably the lowest that will be seen in along time.

Re-fi now, or Re-fi never is my opinion.