--Number of months to recoup closing costs. Calculated by dividing total closing costs by the monthly savings.
--Increase in tax liability. Due to a lower mortgage interest deduction, less tax benefit is generated by the lower interest rate (especially for taxpayers in high tax brackets or taxpayers with a small spread between interest rates).
--Mortgage term. Compare the remaining number of payments of the current mortgage with the total payments of the refinanced mortgage. The term of the original mortgage must be decreased for substantial savings on refinancing to occur.
--Prepayment Penalty. Does existing mortgage have any prepayment penalties.