For many homeowners, the end of the year is full of to-dos—holiday travel, budget planning, maybe a final sprint to max out retirement contributions. But here’s one task that rarely makes the list (and absolutely should): reviewing your mortgage.
No, not just checking that the autopay went through. I’m talking about actually reassessing where your mortgage stands—what you’re paying, what you could be paying, and whether the terms you signed years ago still fit your current financial goals.
Because your mortgage isn’t just a set-it-and-forget-it deal. It’s one of your biggest financial commitments, and the choices you make around it can shape your cash flow, equity, and net worth for years to come.
And as we head into 2026—with mortgage rates shifting, home values recalibrating in many markets, and tax policies potentially changing—this is a smart moment to get a clear, updated view.
An annual mortgage check-in can save you money, shorten your payoff timeline, and help you make smarter housing decisions—with zero pressure to refinance or make a big move.
What’s Your Mortgage Actually Costing You Right Now?
If you’ve had your mortgage for a few years, it’s easy to lose track of the fine print. So let’s start with a quick refresh on the essentials:
- Your interest rate
- Your current loan balance
- Monthly principal and interest
- Remaining term (years left)
- Escrow details (property taxes and insurance)
You can find all this in your mortgage statement or loan portal. But instead of just glancing at the numbers, ask: Are these still the best terms available to me? Do they still match my goals?
In 2024 and 2025, many homeowners locked in mortgage rates between 6%–7%. If you bought earlier and have a lower rate, great—you’re probably in a strong position. But if your rate is higher and your credit has improved, or if your home value has increased, it might be time to run some numbers.
More on refinancing later—but even without refi plans, this snapshot helps you track progress and evaluate equity.
Check Your Current Equity: You May Have More Than You Think
If you bought your home a few years ago, there’s a good chance your equity position has shifted—even if your home’s value hasn’t skyrocketed.
According to data from CoreLogic, U.S. homeowners with mortgages gained an average of $14,000 in equity between Q3 2022 and Q3 2023. That number will vary by market, but the point is: equity growth isn’t just about appreciation. It’s also about how much principal you’ve paid down.
Knowing your current loan balance vs. estimated home value tells you your loan-to-value (LTV) ratio—a key number for lenders and a helpful benchmark for you. The lower your LTV, the better your position for refinancing, home equity loans, or eliminating private mortgage insurance (PMI).
Example: If your home is worth $400,000 and you owe $280,000, your LTV is 70%. That’s excellent—and could open new options.
Run a rough estimate using tools like Zillow, Redfin, or your local assessor. Then compare it to your loan balance to get your equity picture.
Evaluate Your Current Rate Against Market Trends
Now let’s talk rates.
As of late 2025, average 30-year mortgage rates are hovering around 6.5%, but they’ve been on a rollercoaster the past few years. In 2020 and 2021, some borrowers locked in rates under 3%. Others who bought or refinanced during the 2022–2023 spike may be paying closer to 7% or higher.
So what does that mean for you?
- If your rate is above 7%, and your credit score is solid, refinancing could be worth exploring—even if you only reduce the rate by 0.5%.
- If your rate is between 5–6%, run the math. The savings could be modest, but if you plan to stay in the home long-term, refinancing to a shorter term (like a 15-year loan) could make more sense than chasing a lower rate alone.
- If you already have a low rate, you’re likely better off focusing on how you pay—maybe increasing your principal payments or exploring a HELOC for future improvements.
Remember: the best mortgage isn’t just about rate—it’s about how it fits your current budget, goals, and timeline.
Think Bigger: Do Your Mortgage Terms Still Match Your Financial Goals?
This is where a mortgage review gets interesting—because it’s not just about what you have, but what you want.
Ask yourself:
- Is my current monthly payment still manageable with my lifestyle and income?
- Am I trying to pay this loan off faster—or just keep costs low?
- Do I plan to stay in this home for the next 5–10 years?
- Would freeing up cash flow help me pursue other goals (like investing or paying down higher-interest debt)?
For example, let’s say you have 25 years left on a 30-year mortgage. If your financial situation has improved, switching to a 20- or 15-year term could dramatically cut your interest cost and build equity faster.
On the flip side, if your payment feels tight or other priorities have emerged, refinancing into a longer term could free up monthly cash—even if it costs more in the long run.
The key is to align your mortgage structure with the stage of life you’re in now, not the one you were in when you signed the original loan.
Revisit Private Mortgage Insurance (PMI): Can You Drop It?
If you put less than 20% down when you bought your home, there’s a good chance you’ve been paying PMI—and it might be time to kick it to the curb.
Here’s the good news: once your loan-to-value ratio hits 80%, you can often request removal of PMI on conventional loans. At 78%, lenders are required to remove it automatically in most cases.
But here’s the catch: many homeowners qualify for PMI removal months or even years before it actually happens—just because they didn’t ask.
So check your current balance and estimated home value. If you’ve hit that 80% mark, contact your lender to request cancellation. You might need a new appraisal, but the cost could be worth it for the monthly savings.
According to the Urban Institute, PMI costs typically range between 0.5% and 1.5% of the loan amount per year, which means canceling it could save you $1,000–$3,000 annually.
Consider Your Prepayment Strategy: Could a Small Change Make a Big Impact?
Even if you’re not planning to refinance or move, your mortgage review is a great time to reassess your payment habits.
For example:
- Are you paying a little extra toward principal each month?
- Are you making bi-weekly payments (which can add up to one extra payment per year)?
- Have you automated your payments or earmarked future bonuses or tax refunds for lump-sum principal payments?
Small shifts like these can knock years off your loan—without stretching your monthly budget. And as interest rates stay unpredictable, reducing your total debt load may be one of the smartest plays available.
If You’re Thinking of Refinancing in 2026, Prep Now
Even if you’re not ready to refinance today, getting your ducks in a row now puts you in a better position to act when the timing is right.
Here’s what to start reviewing:
- Your credit score: Aim for 700+, ideally 740+ for the best rates.
- Your debt-to-income (DTI) ratio: Keep it under 36% for most lenders.
- Your income documentation: W-2s, pay stubs, tax returns—have them ready.
- Any home improvements: These can boost your appraisal value, which strengthens your LTV ratio.
Also, avoid taking on new debt (like a car loan or large credit card balance) in the months leading up to a refi application. You want your financial profile looking as strong and stable as possible.
Ask the Big Questions About Next Year
Your mortgage review doesn’t have to result in immediate action. In fact, one of its biggest benefits is simply giving you clarity as you move into the new year.
As you review your loan, equity, payment strategy, and long-term goals, ask yourself:
- Is this still the right home—and loan—for me?
- Could this home help me build wealth in new ways (rental income, improvements, etc.)?
- Do I want to move in the next few years—and how does that affect my mortgage planning now?
Even just raising these questions helps you think more strategically. Your mortgage shouldn’t just be a cost—it should be a tool you actively use to support your bigger financial life.
Use your end-of-year financial review to schedule a simple mortgage checkup—even if it’s just 30 minutes with your statements. Small insights now can lead to smarter moves later.
Don’t Let Your Mortgage Run on Autopilot
Your mortgage is probably your biggest monthly expense—and one of your biggest financial tools. But many people never look at it again after closing day.
A smart, annual check-in is one of the easiest ways to protect your equity, uncover potential savings, and feel more in control heading into a new year.
Maybe that means refinancing. Maybe it means dropping PMI. Or maybe it just means choosing to pay an extra $100 a month because now you know how much it’ll save you long-term.
Whatever your next move is, don’t let it be accidental. Make it informed, intentional, and aligned with the life you’re building—not just the house you’re paying for.
