Sure, there’s the money saved by refinancing and paying closing costs again can rot, however, I would think that taking what would have been your mortgage payment and investing it each month in a high interest account, would reap more benefits.
You come out ahead by paying less interest and then on all the money you would have spent on the mortgage, you can earn interest on the investments.
The problem is, most people don’t have the kind of self-discipline to rein in their finances and will spend the extra they’re saving.
This seems simpler to me than people make it.
If you are paying a lower mortgage interest rate than you earn on the investment, it seems like a simple question. But then the question moves to real cost. This writer at least seems to understand that to make the decision you have to include ALL the costs on both sides of the equation. This must include the taxes.
If you can honestly answer that question, then the next issue is risk. I hard all this before from the guys who put their money into flipping houses. It was smart investing right up until 2008! They lost that money and still owe on the mortgages. You simply do not “earn a higher interest rate” without considerable risk.