Refinances Are Up 23%: Is Your Mortgage Working for You?
More homeowners are taking a strategic, big-picture approach to their finances—and home equity is playing a big role in that shift. With high-interest debt, rising living costs, and growing home equity balances, many of our clients are turning to cash-out refinances as a smart financial strategy.
Market Update: Refinance Activity Is Heating Up
Refinance activity has been heating up in recent weeks:
- Refinance applications jumped 23% this month
- Refinances now account for 46.5% of all mortgage activity
- 60% of all refinances last quarter were cash-outs
That last stat is particularly telling. Cash-out refinances just hit a three-year high, and the average homeowner who opted-in pulled out $94,000 in equity.
Why the surge? Because homeowners are thinking bigger. Rather than just focusing on their mortgage rate, they’re using their homes as a financial tool to:
- Pay down high-interest credit card debt
- Fund renovations and home improvements
- Build an emergency fund or invest in other goals
- Improve their monthly cash flow
What Is a Cash-Out Refinance?
A cash-out refinance is a type of mortgage refinance where you replace your existing home loan with a new, larger one—and take the difference in cash. That cash comes from the equity you’ve built up in your home.
Here’s an example:
Let’s say your home is worth $500,000 and you owe $300,000 on your mortgage. You could refinance into a new $400,000 mortgage and take the $100,000 difference in cash (minus closing costs). You still have a mortgage, but now you have funds available to use however you choose.
This can be a powerful financial move, especially if you're carrying high-interest debt or planning big expenses.
Is Now the Right Time to Refinance?
Even if your current mortgage rate is lower than what’s available today, it might still be worth looking at the bigger picture. A slightly higher mortgage rate could be offset by the benefits of paying off debt, investing in your home, or increasing your monthly cash flow.
If you’ve built up significant equity in your home, it’s worth exploring how that equity could be working harder for you.
Closing Thoughts
Everyone’s financial situation is different—and so are the strategies that work best. If you're curious about how a cash-out refinance might fit into your broader financial goals, we’d be happy to walk you through your options.
