Yesterday, I closed on my third refinance. This is my fourth loan for the house in just over 6 years of owning it (http://eis271828.blogspot.com/2007/05/house-closing.html). I opted for a 15-year loan at 3.000% interest, which was the no-cost refinance rate. My out-of-pocket costs were #3115.86, which included $1549.21 in principal reduction, because I wanted the new loan to be a nice round $200K, and the customary prepaid interest and escrow pre-funding. I should get $1,433.34 refunded from my old escrow in awhile. Not too bad.
The 3% interest rate is lower than my estimated long-term rate of inflation (http://eis271828.blogspot.com/2010/08/annualized-inflation.html), which means I am borrowing money for free! The principal portion of my payment is also hugely higher than the interest portion, which makes me all kinds of happy inside. Because I was paying slightly extra on my old loan, my new payment is only about $20 more per month. I will not be paying anything extra toward this mortgage. Except, I am guessing that as I approach the end of the term, I will want to get rid of the monthly payment and still pay it off early.
I also have a nice happy feeling because I just helped the economy! For the most part, mortgages are owned by wealthy companies/individuals, and I lowered the interest rate they're earning from 4% to 3%. My local broker got some extra income, the state of Kansas got some extra fees, and everyone came out ahead!