Most people think refinancing only makes sense when interest rates are low. That’s because they’re focused on the wrong thing. The rate isn’t the problem—cash flow is the problem. The truth is, refinancing can still be one of the smartest financial moves you make, even at a higher rate, if it helps you eliminate bad debt and increase your cash flow.
Let’s talk about the Johnson family. They bought their home in 2020 with a $320,000 mortgage at 3.5%. Their monthly mortgage payment was $1,436. Over time, life happened. They accumulated $40,000 in credit card debt at 21% interest, $35,000 in student loans at 7%, and a $15,000 auto loan at 6.5%. Every month, they were paying $2,050 just to keep up with those debts, bringing their total monthly payments—including the mortgage—to $3,486. They were working hard, making money, but still feeling broke.
That’s when they started looking at refinancing. At first, they hesitated. Why would they refinance at a higher rate? Their loan officer showed them something that changed their entire perspective: the numbers.
Instead of looking at just their mortgage rate, they looked at their total financial picture. By refinancing their home loan to $410,000 at a 6.5% interest rate, they were able to pay off all their credit cards, student loans, and auto loan. Their new monthly mortgage payment was $2,590. Even though their mortgage payment went up, their total monthly expenses dropped by $896.
That’s almost $900 back in their pocket every single month—over $10,000 a year. Money that used to be going toward high-interest payments was now theirs to keep. Instead of paying credit card companies 21% interest, they were using their money to invest, save, and create breathing room in their budget. That’s how you turn your house into a financial tool instead of a liability.
Refinancing isn’t just about chasing the lowest rate. It’s about controlling your cash flow. The people who win financially don’t just look at percentages; they look at how money moves. They make strategic decisions that give them power over their finances instead of letting their finances control them.
So, the question isn’t, “Are rates low enough?” The question is, “Are you using your money the right way?”
If you’re carrying high-interest debt, it’s time to stop letting banks and credit card companies profit off your hard work. A refinance might be the key to getting your money back. Let’s run the numbers and find out.
