The out-of-pocket expenses for each loan are shown above. These include closing costs and monthly payments, but do not include potential tax savings. The longer you intend to hold the loan, the greater the advantage of reducing the interest rate you pay. A refinance may be less advantageous, however, if you intend to sell the home or pay off the loan in the near future. Refinancing may also be less advantageous if you increase the amount of time required to pay off the amount owed, even if you reduce the amount of the monthly payment.   
  
The out-of-pocket expenses for each loan are shown above. These include closing costs and monthly payments, but do not include potential tax savings. The longer you intend to hold the loan, the greater the advantage of reducing the interest rate you pay. A refinance may be less advantageous, however, if you intend to sell the home or pay off the loan in the near future. Refinancing may also be less advantageous if you increase the amount of time required to pay off the amount owed, even if you reduce the amount of the monthly payment.   
    
This graph provides additional detail to the one immediately above. The extra expenses of the less advantageous loan option is charted here.
 
Note that the longer you own the home or the longer you wait to pay off the loan, the greater difference between the expenses associated with the two loans.