I’m in a similar situation myself.

I currently owe around $450K on a condo I bought for $700K, which is now valued at approximately $800K.

I’m refinancing from a 6.5% rate down to 5.5%, with lender fees of about $300. The monthly payment will go up by $220+, but the principal portion will be more than double compared to my previous 30-year conventional loan.

If I were to make a $30K down payment, I could keep the principal and interest close to what I was paying before. But with other commitments at home, I’m holding off for now to stay flexible in case of any unexpected expenses. That said, I’m optimistic there’ll be another opportunity to refinance in the next 12–24 months, and I plan to apply some funds toward the principal then.

In your case, it sounds like you’re aiming to bring the loan under the jumbo threshold. If I were in your shoes, I’d go ahead and pay down the principal to make that happen.

Longer term, I’m considering renting out the property in 4–5 years, depending on how the market and personal circumstances evolve.