Here's Why I Might Never Refinance a Mortgage Again

About 14 million mortgages were refinanced between the second quarter of 2020 and the fourth quarter of 2021, according to the New York Federal Reserve. And mine was one of them.

In the summer of 2020, after shopping around with different mortgage lenders, I managed to land on such a low rate for my home loan that I opted to refinance from a 30-year loan to a 15-year loan. This actually raised my monthly payments by a small amount, but it's saving me a boatload of money on interest.

But while refinancing easily made sense for me in 2020, I don't know that I'll ever be in a position where I need to refinance a mortgage again. Here's why.

1. My current rate is ridiculously low

The rate I'm paying on my mortgage is in the mid-2% range. For context, I'm earning more than 4% on the money I have in my savings account right now.

Even if mortgage rates come down in the next few years, I don't see them dropping to the point where I'll get a better deal than what I have today. Sometimes, it can make sense to refinance a mortgage even when you're not getting a much better rate deal, such as if you want to take cash out of your home. But I also have savings for things like home repairs and improvements, so I don't see myself tapping my home equity via a cash-out refinance.

2. I may not have to take out a mortgage again

At this point, I'm about 12 years from having a paid-off home. And once my home is paid off in full, my goal is to downsize or buy a less expensive home outside of the neighborhood I live in today. Because of this, I hope to be in a position to purchase a home outright with the proceeds from selling my current home. And if I don't need to sign a new mortgage, then there won't be a need to refinance one.

When will refinancing make sense again for most borrowers?

In my case, it's easy to see why I might never refinance a mortgage again. But for many homeowners, a refinance will make sense once rates come down. Of course, that leads to the big question: When will that happen? And the reality is that we really don't know.

Some experts say that today's rates are the ones borrowers should expect for the next few years. But in time, rates should start to fluctuate, and homeowners should be able to explore different options for refinancing.

To be clear, we may never again see the record-low rates that became available in 2020 and 2021. But that doesn't mean rates won't get more competitive. And someone who signs a mortgage at 6.9% today stands to benefit tremendously if rates fall to the mid-5% range and they're able to refinance at 5.6%.

All told, I'm really glad I refinanced my mortgage when I did. And I'll also be happy to not have to go through the refinancing process again.