Is Now the Right Time To Refinance?

Whether to save on interest rates or fund a renovation or other expense, refinancing can still pay off


Submitted by Peoples Bank, written by Senior Mortgage Loan Officer Heidi Kenerson

Sarah and Glen have lived in their home for 20 years, raising their family, undertaking a few smaller renovations as their needs evolve, and paying down their mortgage. All the while, they’ve also been building equity as property values have continued to increase.

Today, they carry about $15,000 in higher-interest credit card debt and have two teens entering college soon.

Aiming to have their children embark on their adult lives without post-secondary debt, Sarah and Glen are considering refinancing — using their home equity to pay off their credit cards and help support college tuition fees.

The right time to refinance?

With world events affecting everything from fuel prices to interest rates, homeowners may be wondering about their options.

In particular, some are questioning if it’s a good time to consider refinancing, whether to consolidate higher-interest loans under a lower rate or take advantage of the equity in their home to fund a long-awaited project, home renovation, or other expense.

Heidi Kenderson. Photo courtesy: Peoples Bank

The short answer is yes, depending on the current rates you’re paying, the amount of equity you have in your home, and your long-term goals.

While rates have gone up over 1% since the beginning of the year, they are still quite low. At the same time, events ranging from the war in Ukraine to ongoing supply chain issues mean future increases are likely.

With all this in mind, here’s why it remains a good time to refinance.

  • Save money on monthly payments: By consolidating higher-interest debt to lower your overall interest rate, you can reduce your overall monthly payments. An interest rate reduction of even half a percent on a $550,000 mortgage, for example, could save you $165 per month — or close to $2,000 per year.
  • Use equity for that long-planned-for project: If you’ve been planning for a home renovation, college tuition, or even purchasing a second home, refinancing can let you pull cash out of your home to make your plans a reality. For every $10,000 added to your mortgage, it only adds about $50 to your payment, which can create a low-interest alternative to other borrowing.

While the financial rewards of refinancing can be significant, the process is relatively simple. In fact, as we emerge from COVID-19 with many new pandemic protocols here to stay — including forms, applications, and approvals largely available digitally — the refinancing process is easier and more streamlined than ever. It’s important to look for a lender that provides the options, rates, and flexibility that work for your needs.

Heidi Kenerson is a Senior Mortgage Loan Officer at the Peoples Bank Bellingham Real Estate Loan Center. To speak with a local home loan specialist, please visit or visit one of Peoples Bank’s nine branch locations in Whatcom County.

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