Should I pay a $1770 fee to refinance a 5.5%,12yr mortgage to a 4.75%,10yr term (Tax Bracket = 28%, P = 127k)?

Praveen Pradeep asked:


Assuming that I can invest the money elsewhere to get a 4.5% return (after taxes), I don’t think I will break even if I refinance. Does this sound right? I am assuming that all my mortgage interest payments are tax deductible.

P stands for Principal remaining on mortgage.

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