Read the setup carefully: in this scenario the refinance rate is higher, and that is a steep price to pay for freed-up entitlement. Going from about 4.375% to roughly 5% raises your rate by more than half a point, which on a loan this size adds several thousand dollars a year in interest. It eases as the balance amortizes down, but it is a meaningful ongoing cost you would be volunteering for. Treat those numbers as an illustration of the trade-off, since rates move constantly and nobody can promise where they will be. The entitlement mechanics matter too: - Refinancing the VA loan into a conventional loan while keeping the home uses VA's one-time restoration of entitlement. You get that specific move once. - After that, restoring entitlement on a property requires actually selling it (or having the loan paid off and assumed by another eligible veteran with substitution of entitlement). So this path can be legitimate if the goal is to free entitlement for one more purchase, but it spends a benefit you only get once while taking a higher rate on a large balance. Personally, we would have a hard time pulling that trigger on these numbers. The call is yours to make with the math in front of you: model the extra interest against what freeing the entitlement actually buys. That is what we do on a Roadmap conversation.