Do I refinance to HIGHER interest rate?

[Jordan Batchelor]

Looking for a little advice

I currently have a house hack that I purchased late 2020 with a VA loan with zero down. It has appreciated to at least 20% since the purchase. My plan was to refinance to a conventional loan with the idea of recycling my VA loan into another multifamily in the future. The problem is that the interest rates have gone up.

Numbers below

Original loan
Purchase price: 780K
Down payment: $0
Interest rate: 2.25%
PITI: $3,915

Projected refinance option

Loan amount 780K
Interest rate: 3.75% – 4.2%
PITI: $4458 – $4748
Monthly payment increase: $543 - $833

I’m in the San Diego market and currently getting $3100 for renting a portion of the property that will increase to $3300-3500 once current tenants move out. Once I move out of our space we’ll be able to get roughly $1500, so total rental value $4,600 - $5,000.

I’d appreciate any help or insight.

Thank you