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The Case for Refinancing a 3% Mortgage

Author: Scott Bialek, Co-Founder of Hurst Lending

Date: December 20, 2023

Have you ever asked what it would take to trade-in your current low-rate mortgage? Even homeowners with a seemingly low 3% mortgage rate may find compelling reasons to consider a cash-out refi?  While 3% is undoubtedly an attractive rate, obtaining a cash-out refinance can offer unique advantages, especially when aiming to optimize financial well-being.

Consolidating High-Interest Debt

One of the most impactful reasons to refinance a mortgage is to consolidate high-interest debt, such as credit card balances. By taking out a cash-out home loan, homeowners can pay off expensive debt, often with a lower blended interest rate. This not only streamlines monthly payments but can save a significant amount of money in interest over time.

Example: Cash-Out Refi to Payoff Credit Card Debt

Consider a homeowner with a 3% mortgage seeking to pay off $60,000 in credit card debt with an average interest rate of 18%. By refinancing and incorporating the credit card debt into the mortgage, the amount of money they could save each year is compelling.

  • Original Mortgage Rate: 3%
  • Current Mortgage Balance: $300,000
  • Current P&I Payment:  $1,421


  • Credit Card Debt Interest Rate: 18%
  • Credit Card Balance: $60,000
  • Monthly Credit Card Payments: $2,337


  • Yearly Savings using a Cash out Refi (at 7.5% Rate) to Payoff Credit Card Debt:  $13,006

In this hypothetical scenario, the homeowner enjoys reduced interest costs on the consolidated debt.


Refinancing a 3% mortgage may seem counterintuitive at first, but when considering the potential benefits such as lower monthly payments and the ability to consolidate high-interest debt, it becomes a strategic financial move. As always, individuals should carefully evaluate their unique circumstances, consult with financial professionals, and explore the available options to make informed decisions about refinancing.  Please contact us if you want us to calculate your monthly savings by using your equity to consolidate your higher-rate credit card debt.


About Scott Bialek

In addition to being one of the founders of Hurst Lending, I am also an attorney and real estate investor. I have a portfolio of residential and commercial properties. I have been helping our customers buy, sell, and refinance their homes since 2000. Our suite of industry-leading offers helps solve many common situations faced by homeowners and real estate investors. Have you ever experienced the frustration of trying to buy before you sell; Losing your dream home in a bidding war; Trying to obtain a No-Seasoning Cash-out loan; Being unable to get a mortgage because your new or old house needs modest repairs; or simply because you prefer using our funds to close quickly without having to liquidate other investments? Our Industry-leading suite of short-term loans solves these issues. We also offer a suite of real estate investor loan products and a full suite of conventional, VA, FHA, construction and traditional home loans.

Please feel free to contact me directly if I can help provide a loan for your next purchase or refinance, or even if you just want advice on how to get started or expand your real estate investing activities.

Scott E. Bialek
Co-Founder, Hurst Lending

*Disclaimer: This article is intended for informational purposes only and does not constitute legal, financial, or professional advice. Consult with a licensed professional before making any financial or real estate decisions.