Should I refinance my 2.25% primary residence to a 7.5%+ DSCR to get equity out

[Lindsey Konchar]

Hello BP!

I'm a new investor (just closed on our first rental - a long-term duplex)! We want to keep trucking down our investing road, but have a few barriers. The first being, we retired my husband out of corporate hell in September (yay!), but going all in on my self-employed business as a financial therapist means two things: 1. We don't have a ton of extra income to be saving for our next investment property and 2. We don't qualify for a conventional loan.

We bought our first rental with a DSCR loan with 25% down and interest rate of 7.5%. (Paid $199,500 and monthly rent is $2,150!)

Additionally, as my business is fully remote, we are moving to Costa Rica for one year - all of 2026! Which means we are going to rent our primary residence. For context, our house is on a 15-year conventional loan with a 2.25% interest rate. We have about $170,000 of equity in the house (but because of our employment arrangement we don't have access to a HELOC. And honestly, I don't know if I would want to be super leveraged anyway).

According to the lenders I've spoken with, we can't do a cash out refi either. I think, as we plan to rent it for all of 2026, we could refi into a DSCR loan? However, we would be losing our 2.25% interest rate and be moving to a 7.5% rate. BUT that $170,000 would give us the potential to buy a few more long-term multi-families.

I'm absolutely positive that there are things I'm not considering, but any help, opinions, and considerations would be appreciated! Thanks!

[Luckson Dambo]

Do Not Refinance Yet, your 2.25% rate is a rare asset. Exhaust alternatives first:  

1. Rent out your primary residence in 2026 and use the income to qualify for a HELOC or portfolio loan later.
  2. Reinvest cash flow from your duplex into savings for future deals.  
  3. Explore non-traditional financing (e.g., private money, seller financing).  
- If Proceeding with Refinancing:  
- Ensure new investments yield minimum 10–15% CoC return to justify the 7.5% loan.
  - Model worst-case scenarios (e.g., vacancies, rate hikes).    

Sacrificing a 2.25% rate for 7.5% debt is hard to justify unless the new investments significantly outperform the added costs. Prioritize preserving your low-rate mortgage while pursuing creative financing strategies for growth.