If you are already hammering the the principle balance down hard each month refinancing may not be the best idea for you. Refinancing a 30 year loan that is 10-12 years deep might not save you any money over the long run, Sure the monthly payment will be lower but the term is extended and you push away the notion of a free and clear home.
Buyers looking to secure that golden deal on the "last home" you'll buy, that deal is hear now. These rates are shaving 10s of thousands of dollars off the effective price of a home. This excerpt from my Real Estate Blog discusses the buying power of low rates,
'Seriously my friends, these are truly fabulous times. Sellers will get the strongest offers when rates are low because more buyers will qualify at the higher price. Buyers will get the most bang for their buck at 3.5%. Buyers can also qualify for a lot more money. The same buyer that qualifies to borrow $240,000 at 4.5% will qualify to borrow $270,500 at 3.5%. These super low rates will allow buyers to essentially get 12.5% more money for the same monthly payment. 4.5% is a great rate, 3.5% is a OMG rate! Be sure to check with your favorite mortgage professional as there are a few variables that banks look at such property taxes, mortgage insurance, etc. But in general these are pretty accurate figures.'
Essentially the payment on a $240k loan at 4.5% is the same as the payment on a $270k loan at 3.5%. The lower rate is giving a $30,000 cash bonus or one could simply enjoy the lower payment on the $240k. Either way if a mortgage is to be part of the retirement plan, these crazy low rates should be taken advantage of.
Talk to your financial planner and/or mortgage professional for more information on using a low rate mortgage to enhance your retirement picture.