Why Homeowners Refinance

Before deciding, it’s important to understand the main reasons people refinance:

• Lowering your interest rate – The classic reason for refinancing is to secure a lower rate, reducing your monthly payment and total loan cost.
  
  

• Switching loan terms – Moving from a 30-year to a 15-year mortgage can help you build equity faster.
  
  

• Eliminating PMI (Private Mortgage Insurance) – If you’ve gained enough equity, refinancing may allow you to remove PMI.
  
  

• Accessing cash – A cash-out refinance lets you tap into your home’s equity for renovations, debt consolidation, or other major expenses.
  
  

• Moving to a fixed-rate loan – Homeowners with adjustable-rate mortgages (ARMs) often refinance to lock in the stability of a fixed rate.
  
  

What Today’s Market Means for You

Mortgage rates have risen compared to historic lows, but that doesn’t automatically mean refinancing is off the table. Here’s what to consider in 2025:

• If your current rate is significantly higher than today’s average, refinancing could still save you money.
  
  

• Equity is key—with rising home values in many markets, you may now qualify for better terms or be able to eliminate PMI.
  
  

• Debt management—even with higher rates, consolidating high-interest credit cards or loans into a mortgage can reduce overall monthly payments.
  
  

Is Refinancing Worth It for You?

Ask yourself these questions:

1. What’s my current interest rate? If today’s rates are at least 0.5–1% lower, refinancing could be worth exploring.
   
   

2. How long will I stay in this home? Refinancing comes with closing costs. If you plan to move soon, you may not break even.
   
   

3. What’s my financial goal? Lower payments? Paying off the mortgage sooner? Accessing cash? Clarity here will help determine if refinancing makes sense.
   
   

4. What’s my break-even point? Calculate how long it will take for your savings to outweigh your refinancing costs.
   
   

Final Thoughts

Refinancing isn’t a one-size-fits-all decision. In today’s market, it’s less about chasing the lowest rate and more about making sure the loan works for your life and goals. If you’re unsure, speaking with a trusted mortgage professional can help you run the numbers and make the right choice.