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Refinancing to Protect Equity

Mortgage rates change over time and this presents an opportunity for homeowners to evaluate their current mortgage and see if they can convert their current mortgage into something that helps them build more equity.

For example, you may have a mortgage with a rate that is higher than what’s currently available, and it’s possible that rates may not be this low again for a while. So you seize the opportunity and refinance from an adjustable rate mortgage into a fixed-rate mortgage for the sake of locking in to the current lower rate, to ensure that you continue to build equity.

Advantages and Disadvantages

There are advantages and disadvantages to refinancing for the sake of your equity.


  • If you can refinance to a lower rate and maintain the same monthly payment, you will build equity much more quickly
  • If you anticipate relocating in a few years, lowering your monthly payment will help you save up to cover the expenses associated with moving
  • Refinancing at a lower rate can free up money that you can use to pay off higher-debt obligations


  • The closing costs associated with refinancing may outweigh the benefits it can provide