This was originally published by Inman on April 14, 2026.
I bought a house with a 7.35% rate in 2024. Refinancing the rate down to 6.2% the next year made the mortgage math easier to stomach.
When I moved from Seattle to Santa Barbara, CA 18 months ago, I knew it was a bad financial decision. But it was a good life decision.
My husband and I wanted to raise our kids in Santa Barbara. I had attended UCSB and lived there for another stint in my mid-twenties; I describe living there as a permanent vacation that’s interrupted by work; it’s building sandcastles in January and walking the kids to school every day of the year.
The only obstacle: sky-high housing costs. For Oprah or people who happen to be British royalty, the cost of buying a home is pocket change. For the rest of us, it’s a challenge. Santa Barbara is one of the most expensive cities in the U.S., with a median home-sale price of nearly $2 million. And Goleta, the small city adjacent to Santa Barbara that’s home to many of the area’s non-celebrities, is almost as pricey.
Of course, homes in Seattle, where we were living before, aren’t exactly cheap. Amazon + Microsoft + tech workers with stock options = high prices. The typical home in Seattle goes for nearly $900,000. My husband and I owned a home in Mill Creek, a Seattle suburb.
We had purchased the Mill Creek home for $777,000 in 2020, the midst of the pandemic homebuying boom, with a 2.9% mortgage rate. Our monthly mortgage payment was $3,800, much lower than it would have been with today’s 6%-plus rates.
Moving to California Doubled Our Mortgage Payment
We were prime candidates to stay put in that Seattle-area house forever, locked in by a low mortgage rate. But we wanted our kids’ hometown to be based on where we’d be happiest, not on the economy.
So in early 2024, when rates were around 6.9%, we sold. Our sites were set on moving to Santa Barbara before our son started TK (one financial benefit of California: free pre-K for all 4-year-olds). We sold our Mill Creek house for $1,450,000; we were lucky that home values had soared.
That equity enabled us to afford a home in the Santa Barbara area when average rates were nearly 7%. One of my BFFs, a local agent, found us a small, off-market fixer-upper in Goleta close to a desirable elementary school. It was a total gut job; the house hadn’t been renovated since it was built in 1960, and it came complete with pink and green shag carpets. Still: the sellers wanted $1.5 million.
Our Original Mortgage: 30 Years, 7.35%, $8,500 Per Month
We negotiated the price down to $1,324,000 because the inspection, as expected, uncovered a lot of issues. That was still a wild price for a somewhat small house with a broken foundation, 40-year-old appliances, and a rotten avocado tree. But: It was our very own house in Santa Barbara. Worth it.
We closed in April 2024 with a monthly payment of $8,500. We put down 20% using the equity from our Seattle-area sale. The best 30-year rate we could get was 7.35%; we took it with an eye toward eventually refinancing.
We also paid roughly $200,000 to renovate the house (also using proceeds from our prior home sale), ditching the green shag carpet and making it livable for our family. We were fortunate that my father-in-law and husband could do almost all the labor themselves.
We moved in September 2024, just in time for our son to start TK. Santa Barbara is sunny and vibrant and neighborly and there’s always saltwater in the air. We walk our kids to school every morning, we boogie board, and watching their baseball games is a sun-soaked sideline party.
The only thing our kids complain about is going to the beach and pool too often. The only thing the adults complain about: our mortgage payment. We make tradeoffs to live here: a strict no-nail-salon policy, for example.
Our Refinanced Mortgage: 20 Years, 6.2%, $8,800 Per Month (and $300,000 in Total Savings)
By September 2025, rates had declined to 6.3%. Plus, I’d improved my credit score by taking the extremely adult steps of 1) buying a bunch of things with my credit card and paying it off immediately, and 2) adding my name to my dad’s credit card (credit scores aren’t fair).
Our mortgage loan had a balance of $1,042,000. Switching to a 6.3% rate from a 7.35% rate would bring our monthly payment down to about $7,700. But then we calculated how much interest we would pay over the course of our 30-year loan. It came out to nearly $1 million on a home we bought for $1,324,000. Using a 30-year mortgage nearly doubled our housing costs, so we investigated a 20-year mortgage.
We had two choices:
One, refinance into a new 30-year mortgage with a 6.3% rate, pay $7,700 per month, and pay about $1 million in interest over three decades.
Two, refinance into a 20-year mortgage with a 6.2% rate, pay $8,800 per month ($300 more than our prior payment), and pay about $700,000 in interest over two decades.
Option two meant we’d own the house free and clear 10 years sooner, and save about $300,000 in interest, which could pay for … about half of a condo in Santa Barbara. But $300,000 is more than zero.
We chose option two, the 20-year mortgage. The cost to refinance was $12,000, which we rolled into the loan. If rates drop again, we’ll refinance again.
Refinancing often makes financial sense, even when rates aren’t plummeting. I won’t argue that buying a small fixer-upper for nearly $1.5 million makes financial sense, but now we’ll own the house free and clear in 2045 instead of 2055. And: we get to live rich lives. Not rich with money, of course, because lots of that goes to our mortgage. Instead, it’s rich with Santa Barbara vibes.
