Refinance or no?

[jfkbengals]

(11-27-2020, 03:28 PM)HarleyDog Wrote: Current interest rate on our home is 6.25% and only owe around 45k left on a 20yr fixed. I think we are roughly 13yrs in.

We want to do some upgrades. We have electric ceiling heat and run window ac’s in the summer. Our electric bill is outrageously expensive and runs $293 avg per month. So, had an estimate ran on a new natural gas furnace and central air. Estimate came in a little above 10k. Also, currently seeking estimate for gas tankless water heater to also save on utilities. Plus a few other small things we are considering.

Our bank is offering 3.49% on a 10 year / 3.74 on a 15yr and 3.875% on a 20yr. So, with the thought of borrowing an additional 20k for upgrades, that would have us refinancing 65k. Our current house payment is $550 and that’s not an issue to make monthly, but looking to upgrade and save cash.

So, for some of you numbers guru’s out there, is refinancing the smart thing to do? 

That is only adding two years, but almost halving the rate.  Clearly the payment would be reduced over what you are currently paying.  If you do the math, continuing to make the current payment amount might even pay off the refi balance + improvement cost in less time than the current term.  In my view that would be a win-win...