To the facts:

Current Mortgage:
$101,167.19. @5.25% 30 year fixed. We have been prepaying rather extensively but out of our "Base" mortgage payment it is still $211 out of $660 that goes into principal.

Refinance Offer:
3.25% 15 year fixed. Closing costs in the end after every possible fee I can think of $2,700. ($1,900 is the actual costs but I'm adding in extra for appraise and other fees).

Last time we refinanced we went from 7% to 5.25% in 2008.

I am generally not a fan of refinancing due to a dislike in upfront costs however I know one of the mistakes people make is not refinancing when they should. For the record, our goal is to pay this place off quickly, but there is no way it will be paid off in less than 5-8 years.

Looks like your payment would go from $660 to about $710. $730 if you roll the closing costs into the loan.

Meanwhile your interest rate would drop two full percentage points. That's something like $2000 per year.

So assuming you can swing the slightly higher payment, it would take about 18 months for the move to pay off. That's a no-brainer.

Agreed with stan. Unless you have the cash to pay it off in the next 18 months, you'll make it up and moreso very quickly.

Looks like a no-brainer to me. If you're on track to pay off your mortgage in 15 years, go for it! Odds are these rates won't last too long, maybe a couple more years.

While I agree with you, mortgage rates could easily keep coming down further. The Fed is actively trying to push down long term rates and mortgages a are long term. It's not a one-to-one relationship but I would not be too surprised to see 30 yr mortgage rates at 3.5% and 15 year rates in the 2's a year or so from now. (But 5's would not surprise me either if economic conditions improve!)

Thanks everyone! I just wanted to have some extra sets of eyes on this. Looks like I will move to go through with this. The upside is that we currently dump over $1000 into the mortgage every month and we have no intention of actually changing our mortgage payment amount. So, extra principal is a good thing.