🏠 Should I refinance my mortgage or invest the savings?
Determine if refinancing your mortgage to lower interest payments is better than investing the difference, considering closing costs and payoff.
Loading chat...
Originally inspired by @archgame's question.
A house is a home first, but it's also an asset with its own financial implications. Sometimes refinancing is necessary to restructure debt or solve a liquidity issues ("cash out").
This View focuses on the case of optimizing cashflow and long-term wealth building by comparing refinancing to investing the would-be closing costs in the market instead.
First, let's gather the details of your existing mortgage. You can find this information on your latest mortgage statement or by logging into your lender's online portal. Accuracy here is key to a meaningful comparison.
Now, enter the terms of the new loan you are considering. A lower interest rate is the most common reason to refinance, but the loan term and closing costs are equally important. Closing costs typically range from 2% to 6% of the loan amount.
Your personal timeline and investment strategy are crucial. The length of time you plan to stay in your home determines whether you have enough time to recoup the closing costs.
For further related reading, check out:
📊 Results
New Monthly Payment
Monthly Savings
Months to Breakeven
72
Refinancing Savings
Investment Value
Which is better?
Invest
Last updated by mahmoud (v25.9.0)
Privacy: None of your data is transmitted to the author of this view or any other third parties. Financial inputs are not used to for identification purposes, and are only used to calculate the result.
Disclaimer: This content and any calculations provided are for informational purposes only. The views, calculations, and methodologies expressed are those of the author and do not necessarily reflect those of this platform. Not financial advice. Users are solely responsible for any decisions made based on this information.
More by @mahmoud
How long will I live?
@mahmoud
A quick way to get an educated guess of your expected lifespan, for the purposes of retirement planning and other views.
Evaluate the financial differences between a big tech and a startup job offer. Understand cash, equity, and risk to make an informed decision.
Estimate the financial costs of raising a child from birth through their third birthday, including delivery, supplies, and childcare expenses.