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Compare mortgage refinance rates in Arizona.
Key Points
• Mortgage refinancing can be a wise financial step, whether borrowers are looking to pay less interest, consolidate debt, or fund a home improvement project.
• A half-percentage-point interest rate reduction can save nearly $50,000 in interest on a $300,000 loan.
• To get the best available mortgage refinance rate in Arizona, cultivate a good credit score, maintain a low debt-to-income ratio, and compare offers from different lenders.
• Government loans such as VA and FHA refinances offer lower rates to those who meet specific eligibility criteria.
• Expect mortgage refinancing to cost 2% to 5% of the loan amount, and factor those costs into the overall cost of a refinance.
Introduction to Mortgage Refi Rates
Refinancing your home loan can be a smart money move. A refinance allows you to replace your existing mortgage with a new one under different terms. Whether you want to lower your monthly payment, shorten the years it takes to pay off your loan, or access some of your home equity, it pays to understand how refinance rates in Arizona are determined and how to get the best rate. This guide will help you through the process. By the end, you’ll have a better understanding of how to make the most of your mortgage refinance.
💡 Quick Tip: Lowering your monthly payments with a mortgage refinance from SoFi can help you find money to pay down other debt, build your rainy-day fund, or put more into your 401(k).
Where Do Mortgage Refinance Interest Rates Come From?
Current mortgage rates are the product of a complex interplay between the economic landscape and your personal financial standing (your equity level and credit score, for example). Historically, the strongest indicator of where mortgage interest rates are headed lies in the performance of the 10-year U.S. Treasury Note. When rates on the note rise, mortgage interest tends to rise too. Another factor is the housing market. When more homes are available than there are buyers, lenders may lower rates to keep customers engaged. Then there is the overall economy: A strong jobs market and economic growth can lead interest rates to rise, while a recession is usually accompanied by lower interest rates.
How Interest Rates Affect Home Affordability
Interest rates play a big role in the affordability of your mortgage refinance. Your monthly payment is a product of your loan amount, the term over which you’re repaying it, and the interest rate. For instance, a $300,000 loan with a 6.00% interest rate and a 30-year term would mean a monthly payment of $1,799. But if your interest rate was 7.00%, the monthly payment would jump to $1,996. Over the life of the loan, that lower interest rate could save you more than $71,000. So small changes in mortgage refinance rates in Arizona can lead to substantial savings over time. Here’s a closer look at how different rates and terms affect payments on a $300,000 loan.
| Interest Rate | Loan Term | Monthly Payment | Total Interest |
|---|---|---|---|
| 6.00% | 30-year | $1,799 | $347,515 |
| 6.00% | 15-year | $2,532 | $155,683 |
| 7.00% | 30-year | $1,996 | $418,527 |
| 7.00% | 15-year | $2,697 | $185,367 |
Why Refinance in Arizona?
Homeowners refinance their mortgages for different reasons. If current interest rates are lower than your existing mortgage, refinancing could save you money. But there are other reasons as well.
Common Reasons to Refinance a Mortgage
• Lower interest rates can mean smaller monthly payments and more savings.
• Adjusting the repayment terms can either ease your monthly budget (a longer term) or help you become debt-free sooner (a shorter term).
• Cashing out equity can help you cover big expenses like education or renovations.
• Switching to a fixed-rate mortgage can offer peace of mind and guard against potential rate hikes.
• If you have an FHA loan and 20% equity, refinancing can remove the FHA mortgage insurance premium. (If you’re wondering how soon you can refinance a mortgage, one good rule of thumb is that you want 20% equity, whatever type of mortgage you have.)
• Consolidating debt can reduce interest payments.
How to Get the Best Available Mortgage Refi Interest Rate
To snag a top-notch mortgage refinance rate, work on elevating your credit score by paying your bills promptly and steering clear of new debt. A debt-to-income ratio of 36% or less is the sweet spot. (To compute your DTI percentage, add up your monthly debts, divide by your gross monthly income, and then multiply by 100.)
Other tips for how to refinance a mortgage are similar to strategies you used to find your first home loan: Shop around and compare interest rates and fees from various lenders. Think about purchasing mortgage points to bring down your interest rate. And if you can swing it, opt for the shortest term to enjoy lower rates. Below are more ways to get smart to the refinancing process.
Understand Trends in Arizona Mortgage Interest Rates
Historical U.S. Mortgage Interest Rates
Seeing trends in U.S. mortgage rates over a long span of time can help put current rates into perspective. Knowing this history can help you make more informed decisions about refinancing. As you can see from the chart below, it’s pretty unusual for rates to dip below 5%. But it’s also not common to see rates over 10%.
Historical Interest Rates in Arizona
It’s important to keep an eye on current mortgage refinance rates in Arizona to make sure you’re getting the best deal you can. But it also helps to have a sense of the history of rates in Arizona. As the chart below shows, Arizona mortgage refinance rates have tended to trail the national average slightly. It’s important to keep in mind that the rates you see advertised are just a starting point. You might end up with a higher or lower rate depending on your credit score and other factors.
| Year | Arizona Rate | National Rate |
|---|---|---|
| 2000 | 7.99 | 8.14 |
| 2001 | 7.00 | 7.03 |
| 2002 | 6.51 | 6.62 |
| 2003 | 5.72 | 5.83 |
| 2004 | 5.73 | 5.95 |
| 2005 | 5.86 | 6.00 |
| 2006 | 6.57 | 6.60 |
| 2007 | 6.46 | 6.44 |
| 2008 | 6.12 | 6.09 |
| 2009 | 5.15 | 5.06 |
| 2010 | 4.81 | 4.84 |
| 2011 | 4.63 | 4.66 |
| 2012 | 3.73 | 3.74 |
| 2013 | 3.85 | 3.92 |
| 2014 | 4.18 | 4.24 |
| 2015 | 3.91 | 3.91 |
| 2016 | 3.76 | 3.72 |
| 2017 | 4.03 | 4.03 |
| 2018 | 4.66 | 4.57 |
Choose the Right Mortgage Refi Type
Which type of mortgage you choose during the refinancing process will also have an impact on your costs. Check out this list of the most common types:
Conventional Refi
This type of refi typically comes with higher rates than government-backed loans, but conventional refis are ideal for homeowners looking to secure a lower interest rate or adjust their repayment term (or both). Arizona refinance rates for conventional loans can vary, so it’s important to compare multiple lenders to find the best terms. Two popular types of conventional refi are the 15-year mortgage and the adjustable-rate refi.
15-Year Mortgage Refi
Refinancing to a 15-year mortgage can slash the total interest you pay over the life of the loan, although it does mean steeper monthly payments. But if your income has increased since you initially bought your home, making higher monthly payments could help you shake mortgage debt sooner.
Adjustable-Rate Mortgage Refi
An adjustable-rate mortgage kicks off with a lower interest rate than a fixed-rate mortgage, although the rate can later adjust based on market conditions. If you’re planning to move before the fixed-rate period ends, an ARM might be a smart refinancing move. Even more so if you suspect that mortgage interest rates might drop in the future (because adjustable rates can adjust up or down). Of course some borrowers opt to refinance out of an ARM and into a fixed-rate loan. Choosing a refinance route is a very personal decision.
Cash-Out Refi
Cash-out refinancing is a savvy way to leverage your home’s equity. Picture this: Your home is valued at $500,000, and you still owe $300,000 on your mortgage. That means you’ve got $200,000 in equity just waiting to be put to work. A lender might agree to let you borrow up to 80% of that equity, which could leave you with $100,000 after you’ve paid off your existing mortgage. Money from a cash-out refinance typically comes to you in a lump sum and can be used for any purpose. Just remember, it is a loan and so your monthly mortgage payments may increase with a cash-out refi.
FHA Refi
FHA loans are backed by the Federal Housing Administration. They often offer lower interest rates — sometimes a full percentage point less — than conventional loans. If you’re already in an FHA loan, you’ve got options like the FHA Simple Refinance or Streamline Refinance. But even if you’re not, you can explore an FHA cash-out refinance or an FHA 203(k) refinance, perfect for those home-improvement dreams.
VA Refi
VA loans, backed by the United States Department of Veterans Affairs, are known for offering some of the most competitive interest rates in the market. To qualify for a VA refinance, also known as an Interest Rate Reduction Refinance Loan (IRRRL), you must have an existing VA loan. This type of refinance can help you secure a lower interest rate and potentially reduce your monthly payments. When you’re looking at the current mortgage refinance rates in Arizona, a VA refinance could be a very cost-effective option for eligible homeowners.
Compare Mortgage Refi Interest Rates
Once you’ve narrowed down your list of possible mortgage refi types, you’ll want to shop around and compare mortgage refinance rates from different lenders. Make sure you look at the annual percentage rate (APR) on different loans, not just the interest rate. (You can often go through a brief online prequalification process to learn what rate a lender might offer you.) Consider the cost vs. benefit of purchasing discount points (also known as mortgage points), which can lower the rate you’re offered. Look closely at how lenders’ fees contribute to mortgage refinancing costs as well. You will probably find a refi calculator to be a handy tool as you examine your options.
Use Online Calculators
An online refinance calculator is an invaluable resource when you’re contemplating your refinancing options. Calculators can help you understand potential financial benefits and mortgage refinancing costs. Here are a few of our favorite calculators to help you make informed financial decisions.
Run the numbers on your home loan.
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Mortgage calculator
Punch in your home loan amount and a new interest rate, and we’ll estimate your payoff date.
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Down payment calculator
Enter a few details about your home loan and we’ll provide your monthly mortgage payment.
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Home affordability calculator
Provide us with a few details and see how much you can afford to spend on a home purchase.
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
The Takeaway
Mortgage refinancing can be a powerful financial tool, reducing interest paid, providing breathing room in your budget, or freeing up equity for big expenses. However, it’s important to weigh the costs and benefits, including closing costs and the impact on your monthly payments. By taking good care of your credit score, lowering your debt-to-income ratio, and comparing rates from multiple lenders, you can secure the best possible refinancing rate and terms in Arizona.
SoFi can help you save money when you refinance your mortgage. Plus, we make sure the process is as stress-free and transparent as possible. SoFi offers competitive fixed rates on a traditional mortgage refinance or cash-out refinance.
A mortgage refinance could be a game changer for your finances.
FAQ
Are refinance rates going to drop?
There’s no crystal ball that can predict future mortgage rates, but you can look at key indicators to try to get a sense of where rates might be headed. If the 10-year Treasury Note rate is rising, the housing market is hot, or the economy is generally strong, it’s unlikely that you will see rates falling in the near term. Keep an eye on the current refinance rates in Arizona so you’ll know when the time to refinance is right for you.
When is it smart to refinance your home?
Refinancing your home can be a smart financial move if you lock in a lower interest rate, consolidate debt, or meet other important financial goals. The key is to do the math to figure out at what point the money you spend on refinancing is outweighed by any cash you save in the refinancing process. How long do you plan to stay in the home? If you think you might move before you’ve recouped the cost, a refi may not make sense.
Can I ask my lender to lower my interest rate?
If you want a lower interest rate, you can start a dialogue with your lender and ask for a reduction, using the current mortgage refinance rates in Arizona as a guide. If you’ve been financially responsible, maintaining a high credit score and making your payments on time, you’re in a good position to negotiate. But don’t be surprised if your lender declines your request.
Can I get cash out of my house without refinancing?
You can tap into your home’s equity to get cash without a refinance by requesting a home equity line of credit (HELOC) or taking out a home equity loan. A HELOC or home equity loan can be a great way to pay for home improvements, consolidate debt, or cover other expenses that come up. Technically, a HELOC or home equity loan is a second mortgage (assuming you still have your first mortgage), so it’s important to find the most competitive interest rate during the application process.
Are there any fees to recast your mortgage?
The fee to recast your mortgage typically ranges from $150 to $500, which is much less than the cost of a refinance. A recast involves using some of your savings to pay down a portion of the principal owed on your mortgage. Your lender then “recasts” your future payments. To determine if recasting your mortgage is worth it, look at how the interest saved over the remaining life of your loan compares to the earnings or savings you might enjoy if you used that lump sum in another way — for example, to pay off some other form of debt, or to make investments.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article. Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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More refinance resources.
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7 Signs It’s Time for a Mortgage Refinance