Refinancing in 2025: Does It Make Sense in Today's Environment?

As central Wisconsin's trusted financial partner, we're often asked whether now is a good time to refinance. With interest rates experiencing some volatility in early 2025, it's a question worth exploring. Let's break down the current refinancing landscape and help you determine if refinancing makes sense for your situation.

The Current Mortgage Environment

Mortgage rates have been on a bit of a rollercoaster ride lately. According to recent data, 30-year fixed mortgage rates are hovering around 6.5%, while 15-year fixed rates sit near 5.9%. Rates have shown volatility, with some days seeing spikes followed by slight decreases.

Freddie Mac reported that the average rate for a 30-year fixed-rate mortgage was 6.62% for the week ending April 10. While these rates are higher than the historic lows we saw during the pandemic, they've stabilized somewhat from their peak in late 2023.

Auto Loan Refinancing Trends

The auto loan market shows similar patterns. According to industry experts, the first half of 2025 might not be ideal for refinancing since the Federal Reserve is stepping back from rate cuts. However, auto refinance rates remain competitive at many financial institutions, especially credit unions like ours.

Refinancing your auto loan can make good financial sense if your credit has improved since your original loan, you initially financed through a dealership, or if you're struggling with your current lender.

When Does Refinancing Make Sense?

For Mortgages:

  1. If Your Credit Score Has Improved
    Better credit can qualify you for lower rates, potentially saving thousands over the life of your loan.

  2. If You Need to Lower Monthly Payments
    Extending your term might increase total interest paid but can provide much-needed budget relief and allow you to increase your payment later, paying down your principal balance faster.

  3. If You Want to Switch from an Adjustable Rate to Fixed Rate
    With a fixed-rate mortgage, your rate is locked in from day one, providing stability in an uncertain economic environment.

  4. If You Want to Tap into Home Equity
    A cash-out refinance could help you access funds for home improvements or other financial needs.

For Auto Loans:

  1. If You Can Secure a Lower Rate
    Some experts suggest refinancing when you can lock in a rate that's 1-2% less than your current auto loan rate, though your specific financial goals will determine if it's worthwhile.

  2. If You Want to Change Your Loan Term
    Extending your term can lower monthly payments, while shortening it reduces total interest paid.

  3. If You're Unhappy with Your Current Lender
    PSCU offers personalized service from people you know and trust.

The Refinance Break-Even Point

Before refinancing, it's crucial to calculate your break-even point – the time it takes for your monthly savings to exceed the closing costs of refinancing. At PSCU, we offer simplified mortgage refinancing with minimal closing costs, making the break-even point potentially come sooner.

Use our Simple Loan Calculator to compare your current loan with potential refinance options.

“The best way to determine if refinancing is right for you is to speak with one of our financial experts.”

PSCU's Refinancing Options

Mortgage Refinancing

  • Streamlined process with minimal closing costs

  • Maximum of 80% loan-to-value ratio

  • One employee handles your entire loan process - no need to be juggled between multiple departments waiting for updates

  • Pre-approvals typically within 24 hours

Auto Loan Refinancing

  • Competitive rates for vehicles from other institutions

  • 100% financing available for vehicles ten years and newer

  • Approval typically within 24 hours with a complete application

Is Now the Right Time for You?

Refinancing activity has been relatively low lately, as many homeowners locked in rates between 3-4% during the pandemic. But everyone's situation is different.

If you're currently paying significantly higher rates than today's market rates, have improved your credit score, or need to adjust your loan term, refinancing could make financial sense even in the current environment.

The best way to determine if refinancing is right for you is to speak with one of our financial experts. Our team can analyze your specific situation and help you make the choice that aligns with your financial goals.

Take the Next Step

Ready to explore your refinancing options? Contact our lending team today:

Or stop by our Wausau branch for a personalized consultation. As your local credit union, we're here to help you navigate today's financial landscape with confidence.

Loans, MortgagesKyle Turner