Is Your 3% Mortgage Rate Keeping You Broke?

Michael Delano | November 21, 2025

If you bought a home from about 2019 to 2022 with a rate in the range of 2.75–4.5%, that rate feels sacred. I get it. You worked hard for that number, and you are emotionally tied to it!

But here is the problem: Visa and Discover do not care about your trophy mortgage rate.

Right now, the average credit card APR is over 22% and has been climbing. Used car loans are often in the 10–12% range. Meanwhile, 30-year fixed mortgage rates are sitting in the 6-6.625% range.

So, the real question is not “What is my mortgage rate?” But “What is my total monthly cash flow and how fast can I get out of debt?”

Here is a simple Example:

Meet “Sam and Taylor” and their financial details:

• Current mortgage: $400,000 at 3%
• Payment: about $1,685/month (just the principal and interest)
• Credit cards: $40,000 at ~22% APR
• Payment on a 5-year payoff schedule: about $1,105/month
• Auto loan: $25,000 at ~10% APR
• 5-year payment: about $530/month
• Total monthly outflow today:
  $1,685 + $1,105 + $530 = $3,320/month

Now we look at a cash out refi:

• New mortgage: $465,000 at 6.5% for 30 years
• Payment: about $2,940/month
• Credit cards: paid off
• Auto loan: paid off
• New total monthly outflow: about $2,940/month
• That is roughly $380/month in extra cash flow or $4,560 a year in positive cash flow for the family.

“But Scott, the rate is higher!” Correct. The rate on the tax-deductible mortgage is higher than it was, but the result is:

• Hundreds more in monthly cash flow
• All that toxic 22% credit card interest gone
• One payment, one plan, no juggling due dates
• The key is discipline: use the refinance to wipe out the bad debt, then do not run the cards back up. Take part of the new monthly savings and automate it into savings or long-term investing-compounding interest is the 8^th wonder of the world…

If you are sitting on a low mortgage rate but drowning in double digit debt, let’s run the numbers together. If the math does not improve your cash flow and long-term wealth, I will be the first one to tell you to keep your current loan. Call me and let’s see what we can do for you!

Scott Davis
Regional Vice-President
NMLS ID 166596

O: (571) 800-1974 | M: (703) 209-3138 
E: scott@davisteam.com
W: DavisTeam.com