What is the primary purpose of a mortgage refinance?

The primary purpose of a mortgage refinance is to replace current financing with a new and potentially larger loan. This process allows homeowners to secure a new mortgage that may offer better terms, such as a lower interest rate, which can reduce monthly payments, or it may allow them to access equity in their home through cash-out refinancing. By refinancing, homeowners can also consolidate debt, improve cash flow, or adjust the mortgage term to better fit their financial situation.

The other options do not accurately capture the main intent of mortgage refinancing. Lowering property taxes is not a function or benefit of refinancing; instead, it involves assessing the property's value and local tax regulations. Switching from a fixed-rate to a variable-rate mortgage can be part of refinancing but is just one of many strategies and not the primary goal. Obtaining cash for home renovations is a specific outcome of cash-out refinancing, but it does not encompass the broader reasons why homeowners often choose to refinance, which typically includes adjustments for overall financial strategy rather than limiting the purpose to funding renovations.