It’s no secret 2025 is a tough year for real estate, from stubborn interest rates that just won’t budge, to a lack of affordable housing inventory.

Even in this volatile state of real estate, you may be wondering if you should refinance your mortgage right now as a Colorado homeowner. Sure, we’ve all heard the advice of only refinancing if you can get a lower interest rate. However, as the market has shown us the past couple of years, interest rates don’t always decrease, yet our need for a refinance may still exist. So what are the case scenarios where a refinance might make sense in this economy?

If You Can Save on Your Monthly Mortgage Payment

Even if rates haven’t dropped significantly, refinancing could still save you money if your current mortgage has a higher rate than what’s available now.

Colorado homeowners who purchased in 2022 or early 2023 may still be carrying rates well over 7%. If you can refinance to even half a percentage point lower, the monthly savings can add up, especially over the long term. A lower payment can free up cash for everyday expenses or help you build up your emergency fund.

Use Space Age’s refinance calculator to help you crunch the numbers and how much savings you might realize.

If You Need to Access Your Equity

If you’ve built up equity in your home, a cash-out refinance might make sense. Accessing your equity can cover big-ticket items like home renovations, medical expenses, or consolidating high-interest debt.

Since you’re replacing an existing mortgage with a new one with a cash-out refinance, you should make sure the new loan’s rate and monthly payment still fit comfortably into your budget. Don’t forget to factor in room for potential increases, such as the rising property taxes in Colorado or increase homeowners insurance rates.

If You Want to Change Loan Terms or Types

Even if you’re facing a higher interest rate, you might need to refinance if you want to change the loan terms or type of loan. For example, if you want to refinance from a 30-year mortgage into a 15-year option, or an adjustable rate mortgage (ARM) into a fixed rate.

You may also need to refinance in case of a major life change, such as divorce or if you want to remove a co-signer from the original mortgage. In these cases, it may not be possible until a lower rate comes along, but rather out of necessity.

If You Can Eliminate Private Mortgage Insurance (PMI)

Another scenario for refinancing in 2025 is if you can eliminate the pesky PMI from your mortgage. If you purchased your home with less than 20% down, you’re likely paying PMI, which can cost hundreds of dollars a month. Unfortunately, it isn’t automatically eliminated once you’ve hit 20% equity, which is why you have to refinance.

If your home’s value has increased and/or you’ve made years of PMI payments, you may be able to refinance and eliminate it altogether.

You can use the financial calculators available from Space Age, or talk to one of our lending experts today to see if refinancing may be a smart move for you in 2025.