Farmers & Merchants State Bank
Updated Wed November 19, 2025
Published Under: Buy and Selling Your Home Mortgages
If you’re a homeowner in Southern Wisconsin, chances are you’ve watched mortgage rates rise, fall, rise again, and now, finally, start to show signs of movement. Many families here in Lake Mills, Waterloo, and Marshall locked in their mortgage during those rocky 2022–2023 years, when 7%+ rates were the norm.
If that sounds familiar, here’s the big question:
Is your mortgage rate still 7% (or close to it)? If so, 2025 might be your moment to refinance.
Even with today’s rates still above pandemic lows, thousands of Wisconsin homeowners are refinancing right now to:
- Lower their monthly payment
- Shorten their loan term
- Remove private mortgage insurance (PMI)
- Switch from an adjustable-rate mortgage (ARM) to a fixed rate
- Use their home equity to pay for upgrades or consolidate debt
And because Farmers & Merchants State Bank is your local lender, with branches in Lake Mills, Waterloo and Marshall, we can help you understand whether refinancing truly makes sense for your situation.
Let’s walk through everything you need to know.
Table of Contents
Click to jump to a section:
- Should You Refinance in 2025?
- Current Wisconsin Mortgage Rates (Nov 2025 Update)
- Top Reasons Wisconsin Homeowners Refinance
- 7 Signs It’s Time for YOU to Refinance
- Refinancing Step-by-Step
- What Refinancing Costs (and How to Reduce It)
- Refinance vs. HELOC vs. Home Equity Loan
- Market Trends in Lake Mills, Waterloo & Marshall
- Refinance FAQs
- See Your Savings With F&M Bank
1. Should You Refinance in 2025?
Short answer? Maybe — and definitely worth checking.
Long answer? Interest rates have shifted, home values have risen in Southern Wisconsin, and many homeowners who refinanced during the 2022–2023 surge are sitting on interest rates much higher than 2025 averages.
Refinancing can help if you want to:
- Save money every month
- Lower your interest rate
- Pay off your house faster
- Fund a major upgrade
- Eliminate private mortgage insurance (PMI)
- Move from an adjustable-rate mortgage (ARM) to something more stable
You don’t need perfect credit.
You don’t need a huge income.
You just need someone local to help you run the numbers.
2. Current Wisconsin Interest Rates
Here’s a snapshot of Wisconsin’s average mortgage rates as of November 2025:
- 30-Year Fixed: 5.99% – 6.50%
- 15-Year Fixed: 5.50% – 5.81%
- 7/1 ARM (Adjustable-Rate Mortgage): 5.96% – 6.25%
Note: Rates dipped slightly after the Federal Reserve rate cut in September 2025.
Why this matters:
If your current rate is around 7% or higher, you may be able to:
- Reduce your monthly payment
- Build equity faster
- Save money over the life of your loan
A 1% drop doesn’t sound like much, until it saves you tens of thousands over time.
Local insight: Rising property values in Lake Mills, Waterloo, and Marshall mean many homeowners have more equity than they think, opening the door for cash-out refinancing or improved loan terms.
3. Top Reasons Homeowners Refinance in 2025
Refinancing isn’t just about chasing a lower rate. Wisconsin homeowners are using it for:
Lower monthly mortgage payments
Even a small reduction in rate can create meaningful savings.
Switch from ARM → Fixed-Rate
ARM (Adjustable-Rate Mortgage) borrowers especially benefit from locking in stability.
Remove PMI (Private Mortgage Insurance)
You can often eliminate PMI once you reach about 20% equity, and refinancing can make this possible.
Consolidate high-interest debt
Many Wisconsin families roll student loans, credit cards, or personal loans into one lower mortgage payment.
Fund home renovations with equity
Roofs, siding, windows, additions, garages — refinancing can unlock the funds.
Shorten your loan term
Switching from a 30-year to a 15-year mortgage can reduce total interest by hundreds of thousands.
4. 7 Signs It’s Time to Refinance Your Wisconsin Home
The truth is: most families don’t realize they qualify.
1. Your current rate is 7% or higher
This one is huge, and extremely common from 2022-2023 loans. If you’re in the 7–8% range, refinancing could save you thousands per year.
2. Your home value has risen
Southern Wisconsin home values have climbed since 2021, especially in Dane and Jefferson Counties.
3. Your ARM reset is coming soon
ARM adjustments can create unpredictable monthly payments.
4. Your credit score improved since you bought
Better credit = better rate options.
5. You want to eliminate PMI
PMI can cost $30–$200+ per month.
6. You’re staying in your home for at least 2–3 more years
That gives time to benefit from savings.
7. You feel “tight” month-to-month
Refinancing can ease your budget and free up cash flow.
5. How Refinancing Works (Step-by-Step Guide)
Don’t worry — it’s simpler than it sounds.
1. Review your current loan
Find your rate, remaining balance, term and payment.
2. Get a refinance quote from F&M Bank
This is free — and our team can run the numbers for you.
3. Compare loan options
We’ll help you choose:
- Lower rate
- Shorter term
- Cash-out vs. traditional
- PMI removal options
4. Apply for your refinance loan
Submit income and financial documents.
5. Lock your rate
This protects you from changes during the process.
6. Appraisal and underwriting
Determines your home’s current value.
7. Close your loan
Your old loan is paid off and your new one begins.
Done. That’s it!
6. What Does It Cost to Refinance? (And How to Save)
Refinance closing costs typically run:
2% – 6% of your loan amount
But you may not have to pay out-of-pocket.
You can often:
- Roll closing costs into the new mortgage
- Choose a lower-cost refinance structure
- Use lender credits
- Benefit from local, not national, fee structures
Break-Even Point Example
If refinancing saves you $180/month and costs $2,000, break-even = 11 months.
If you’re staying longer than 1–2 years, the savings add up.
7. Refinance vs. HELOC vs. Home Equity Loan
Refinance
Replaces your entire mortgage with a new one.
Best for:
- Lower rate
- Lower payment
- Removing PMI
- Shorter loan term
HELOC (Home Equity Line of Credit)
A revolving credit line, like a credit card secured by equity.
Best for:
- Ongoing projects
- Tuition
- Emergency fund
Home Equity Loan
A lump-sum loan secured by home equity.
Best for:
- One-time major expenses
- Debt consolidation
F&M can help identify which option is right for your goals. Contact us today for help!
Refinance Options at Farmers & Merchants State Bank
F&M offers local, flexible options including:
Rate-and-term refinance
For homeowners looking to lower their monthly payment or shorten the loan.
Cash-out refinance
Convert equity into cash for home upgrades, emergency funds, debt consolidation, etc.
Shorter-term refinance (10-, 15-, 20-year loans)
For those who want to reduce long-term interest costs.
Why choose a Local Wisconsin bank instead of a big lender?
- Real people who live here
- Local appraisers + underwriting
- Easier communication
- Better understanding of the local housing market
- No giant customer service loop
You’re not just refinancing; you’re working with a team that cares about your community.
8. Local Market Trends: Lake Mills, Waterloo, Marshall (2025)
Lake Mills, WI
- Rock Lake continues to draw buyers
- Property values showed moderate appreciation
- Growing appeal for Madison commuters
Waterloo, WI
- Trek Bicycle & local employers provide economic stability
- Home values trending upward in many neighborhoods
Marshall, WI
- Small-town appeal with strong community ties
- Steady home value increases over recent years
Rising home values = more equity, which can make refinancing easier and more beneficial.
Related: Top 6 Places to Build Your Dream Home in Southern Wisconsin
9. Refinancing FAQs
What is PMI?
Private Mortgage Insurance — required if you put less than 20% down.
What is an ARM?
Adjustable-Rate Mortgage — rate changes regularly.
What is a cash-out refinance?
A refinance where you borrow more than your current balance and take the extra cash.
What happens to my property taxes?
They stay the same; refinancing doesn’t change them.
Will refinancing hurt my credit?
You may see a small dip from the inquiry, usually temporary.
How fast can I refinance?
Some refinances close in as little as 30 days.
Can I refinance if I just bought my home?
Yes, though break-even should be considered.
Can I refinance if I’m self-employed?
Absolutely. You just need additional documentation.
Related: Everything You Need to Know about Escrow
Should You Refinance in 2025?
If your current mortgage rate is close to or above 7%, or if your home value has risen, or if you’re ready for more financial breathing room…
This may be the smartest year to explore refinancing.
At Farmers & Merchants State Bank, we make the process:
- Local
- Personal
- Transparent
- Stress-free
Whether you’re in Lake Mills, Waterloo, or Marshall, our mortgage experts will walk you through the numbers and help you decide what’s right for you.
Ready to See What You Could Save?
Talk to an F&M lender today — no pressure, just guidance.
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