ILLINOIS MORTGAGE REFINANCE RATES TODAY
Current mortgage refinance rates in
Illinois.
Current mortgage refinance rates in
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Compare mortgage refinance rates in Illinois.
Key Points
• Mortgage refinance rates are influenced by a variety of economic factors, including Treasury note rates and inflation.
• Even a 1% dip in the refinance rate can lighten the monthly debt load and save a significant sum over the life of the loan.
• To get a good mortgage refinance rate, it helps to have a strong credit score and a low debt-to-income ratio.
• VA loans and FHA loans are known for offering some of the most competitive mortgage refinance rates to eligible borrowers.
• Opting for a 15-year mortgage could mean higher monthly payments, but a major interest savings over the loan’s lifetime when compared to a 30-year term.
Introduction to Mortgage Refinance Rates
Mortgage refinance rates may go up or down by a fraction of a percentage point, but these little numbers have a big impact on your financial situation. When you refinance your home loan, you replace your current home loan with a new one. This can mean resetting the loan term, changing the interest rate, or both. Whether you want to lower your monthly payments, shorten your loan term, or tap into your home’s equity, it’s important to understand how mortgage refinance rates work. This guide will help you understand what affects current mortgage rates and how to find the best rate for your situation. First step? Learn what drives the numbers.
💡 Quick Tip: If you’re wondering how soon can you refinance your mortgage, know this: It varies by loan type, but the typical waiting period is 6 to 12 months.
Where Do Mortgage Refi Interest Rates Come From?
Mortgage refinance rates are a product of both economic conditions and your own financial standing. Historically, the strongest indicator of the direction mortgage interest rates are headed lies in the bond market, in the performance of the 10-year U.S. Treasury Note. When the rates on the note rise, mortgage interest tends to go up, too. Another factor is the performance of the housing market. When there are more homes available than there are buyers, lenders may lower rates to keep attracting customers. Then there is the overall economy: A strong jobs market and economic growth can lead interest rates to rise, while a recession usually means lower interest rates.
How Interest Rates Affect Home Affordability
Interest rates play a significant role in the affordability of your mortgage refinance. Your monthly payment hinges on the loan amount, term, and the refinance rate you secure. Let’s say you are borrowing $400,000. If you scored a 6.00% interest rate and took out a 30-year loan, you would pay $2,398 per month. But at a 7.00% rate on a 30-year loan, the monthly payment jumps to $2,661. Not everyone will sweat the extra $263 per month, but over the life of the loan the homeowner with the lower interest rate would save almost $95,000 in interest.
Common Reasons to Refinance a Mortgage
Refinancing a mortgage is often a savvy financial move. If the current interest rates are more favorable than your existing mortgage, it might be the perfect time to refinance. But refinancing can also open doors to a change in your repayment term. Some borrowers want to keep monthly payments low, so they extend the number of years they take to pay off their loan. Others want a shorter loan term to save money on interest.
Still others refinance in order to pull equity out of their home (more on that process, called a cash-out refinance, later). Borrowers with an adjustable-rate loan sometimes refinance when their loan is on the verge of a change, eyeing a switch to a fixed-rate loan for peace of mind. Another reason some people refinance? If an owner has an FHA loan and hits 20% equity, they can get rid of the FHA mortgage insurance premium by refinancing.
How to Get the Best Available Mortgage Refi Interest Rate
As you’re thinking about how to refinance a mortgage, there are some steps you should take immediately that will help you secure the best available mortgage refinance rate.
• Work on strengthening your credit score by paying bills punctually and steering clear of new debt.
• Lower your debt-to-income ratio (DTI) by paying off some recurring debt or boosting your income. (Lenders like to see a DTI of 36% or less on a refinance.).
• Think about whether you have any extra cash on hand that you could use to buy mortgage points (also known as discount points) to lower your interest rate.
• Look closely at your budget to determine whether you might be able to choose a shorter loan term of 10 or 15 years on your refinance. A shorter term typically means higher monthly payments but less interest paid over the life of the loan.
Of course, one major step to take is to educate yourself about current mortgage interest rates in Illinois. We can help with that.
Understand Trends in Illinois Mortgage Interest Rates
Illinois mortgage interest rates have seen their ups and downs in recent years, as shown in the chart below. As you can see, the Illinois rate hews close to the U.S. average, sometimes falling just below it and sometimes creeping slightly above.
Historical U.S. Mortgage Interest Rates
Having a sense of a longer span of history may help put current mortgage rates in perspective. For a long time, from early 2011 until early 2022, the average 30-year mortgage rate in the U.S. didn’t rise above 5.00%. And in 2020, the rate dropped to a historic low below 3.00%. Many borrowers today may be wondering if they should wait for a really low rate, but looking at the history of more than 50 years of mortgage rates, it’s easy to see how unusual a rate below 5.00% (or above 10.00%) would be.
Historical Interest Rates in Illinois
This chart shows how Illinois mortgage refi interest rates have stuck pretty close to the national rates from 2000 to 2018.
| Year | Illinois Rate | National Rate |
|---|---|---|
| 2000 | 7.79 | 8.14 |
| 2001 | 6.97 | 7.03 |
| 2002 | 6.36 | 6.62 |
| 2003 | 5.54 | 5.83 |
| 2004 | 5.56 | 5.95 |
| 2005 | 5.78 | 6.00 |
| 2006 | 6.65 | 6.60 |
| 2007 | 6.56 | 6.44 |
| 2008 | 6.09 | 6.09 |
| 2009 | 5.20 | 5.06 |
| 2010 | 4.97 | 4.84 |
| 2011 | 4.69 | 4.66 |
| 2012 | 3.70 | 3.74 |
| 2013 | 3.87 | 3.92 |
| 2014 | 4.13 | 4.24 |
| 2015 | 3.86 | 3.91 |
| 2016 | 3.70 | 3.72 |
| 2017 | 4.03 | 4.03 |
| 2018 | 4.66 | 4.57 |
Choosing the Right Mortgage Refi Type
Once you have a handle on the highs and lows of mortgage rates, it’s time to explore your options for mortgage refinancing in Illinois. Here are some of the more popular ways to refinance:
Conventional Refi
A conventional refinance, also known as a rate-and-term refi, gives you the freedom to adjust your interest rate or loan term (or both). While conventional mortgages generally come with slightly higher mortgage refinance rates than government-backed loans, they offer lots of flexibility. Two common options include a 15-year mortgage and an adjustable-rate mortgage.
15-Year Mortgage Refi
It’s no secret that 15-year mortgage refinance rates are often lower than the 30-year variety. Consider this: A 30-year $500,000 loan at 7.50% would mean a monthly payment of around $3,496 and total interest paid of about $758,586 over the life of the loan. Refinance to a 15-year mortgage at 7.50%, and your monthly payment would increase to about $4,635. However, you’d be looking at savings of more than $400,000 in interest over the life of the loan.
Adjustable-Rate Mortgage Refi
Adjustable-rate loans are attractive to some refinancers because they usually start with a lower mortgage refinance rate than fixed-rate loans. If you currently have a 30-year fixed-rate mortgage, but think you might move out of your home before the loan term is up, you could consider refinancing to an adjustable-rate mortgage (ARM). (Some borrowers, on the other hand, prefer to refinance out of an ARM into a fixed-rate loan.)
Cash-Out Refi
A cash-out refinance lets you tap into your home’s equity. Your new loan pays off your old mortgage and provides you with a lump sum to use for renovations, education costs, or other big expenses.
FHA Refi
FHA loans, backed by the Federal Housing Administration, often come with lower mortgage refinance rates — maybe a full percentage point lower. Some FHA refinance options are only available to those who already have an FHA loan, like FHA Simple Refinances and FHA Streamline Refinances. However, two types of FHA refinance options are available to those who don’t currently have an FHA loan: an FHA cash-out refinance or an FHA 203(k) refinance, which is a renovation or rehabilitation loan.
VA Refi
VA loans, backed by the U.S. Department of Veterans Affairs, consistently offer some of the most competitive mortgage refinance rates available in the financial market. To qualify for a VA refinance, also known as an interest rate reduction refinance loan (IRRRL), you must currently have a VA loan. This type of refinance has the potential to significantly lower your monthly payments and generate substantial interest savings over the life of the loan.
Compare Mortgage Refi Interest Rates
As you explore possible refinance options, you’ll want to begin to compare interest rates and the total cost of each possible path. Here are some tips:
• Shop around with a few lenders to compare rates and fees.
• When you’re comparing offers, look at the annual percentage rate (APR) for each loan. This is the best way to see what you’ll actually be paying.
• Be sure to weigh the trade-offs between a lower rate and the associated fees. Sometimes, a lower rate comes with higher costs.
• Make sure you include closing costs in your calculations. Some lenders offer a so-called no-closing-cost refinance. However, that usually means either rolling the closing costs into the new mortgage principal or exchanging them for a higher interest rate.
• Crunch the numbers to see the full picture of your mortgage refinancing costs, and pinpoint when you’ll start reaping the benefits. (Hint: Benefits start when the amount you save on your monthly payments exceeds the amount you spend to close on the new loan.)
• Remember, if your current rate is already a good deal lower than what’s out there, a refinance might not be worth it.
Online Refinance Calculators
An online refinance calculator will be your best friend during the refi process. By carefully comparing different refinance options (rates and terms), you can make an informed decision that aligns with your financial goals and circumstances. Here are a few useful calculators:
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
Refinancing your mortgage can be a savvy financial move, but it’s not something to jump into without careful thought. By getting to know the different types of refinances, such as cash-out, FHA, VA, and 15-year loans, among others, and by taking steps to improve your financial health, you can set yourself up to get the best available mortgage refinance rate and meet your financial goals.
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
Can I refinance when rates are low?
When interest rates go down is a good time to refinance, provided you haven’t refinanced recently (or didn’t just purchase your home). Refinancing a mortgage does come with fees and expenses, such as appraisal fees and lender fees. You’ll want to weigh these costs against the potential savings in interest payments from a lower interest rate.
How much are closing costs on a refinance?
Closing costs usually tally up to 2% to 5% of your loan amount. So for a $300,000 refinance, you might be looking at anywhere from $6,000 to $15,000. The exact figure can fluctuate based on a few variables, such as the type of loan, your lender, and the property’s location. It’s essential to keep these costs in mind when you’re planning your refinance budget, as they can make a significant difference in the overall price of your loan.
How much would a 1% drop in interest rate affect your monthly payment?
You’d be surprised at how much a 1% reduction in your mortgage refinance rate can impact your monthly budget. Let’s say you have a $300,000, 30-year mortgage. If you’re currently paying 7.00% interest and can refinance to 6.00%, you could see a $197 drop in your monthly payment. Over time, that seemingly small change can add up to big savings.
Does refinancing ding your credit score?
Refinancing might cause a temporary dip in your credit score, but the effects are typically minor and brief. As long as you manage your new mortgage responsibly (and do the same with other credit lines you may have), your credit score should bounce back.
How many times can you refinance your home loan?
You can refinance your home as many times as you want. However, the process can be costly (not to mention somewhat time-consuming), and each time you refinance, you will see a temporary dip in your credit score. Before you refinance, it’s important to weigh the pros and cons, especially if the interest rate reduction is minimal.
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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How Much Does It Cost to Refinance a Mortgage?
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How to Refinance a Home Mortgage Loan
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7 Signs It’s Time for a Mortgage Refinance