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Compare mortgage refinance rates in Indiana.
Key Points
• Mortgage refinance rates are influenced by a variety of economic factors, including the Federal Reserve’s policies, inflation, and the bond market. Your personal financial profile will also play a role in the rates you are offered.
• In Indiana, refinance rates have shifted dramatically in the last few years, from a low of 3.15% in 2021 to a 7.00% high in 2023.
• A 1.00% drop in your mortgage rate in Indiana could translate to substantial monthly savings — around $2,000 a year on a $300,000 loan.
• Government-backed loans such as FHA and VA may offer you lower mortgage refinance rates and more flexible criteria. These loans are accessible to a broad range of borrowers.
• Closing costs for mortgage loan refinancing usually fall between 2% and 5% of the loan amount. Measure these costs against your potential savings to determine if a mortgage refinance is the right move for you right now.
Introduction to Mortgage Refinance Rates
To start: What is a mortgage refinance? It’s what you do to give your current home loan a makeover. Your new loan may have different terms that can be more favorable than those of your existing mortgage. You also may be able to lower your interest rate.
Homeowners thinking about refinancing can find a lot of different motivations for doing it, in Indiana and elsewhere. Maybe you’re hoping to lower your monthly overhead, or to tap some of your equity for a bathroom renovation. How soon can you refinance a mortgage? It is going to depend on a number of factors.
This guide will help you understand how mortgage refinances work and how to get the best rates in today’s market, focusing on factors that affect Indiana homeowners.
💡 Quick Tip: How soon can you refinance your mortgage? It varies by loan type, but typical waiting periods are 6 to 12 months.
Where Do Refi Interest Rates Come From?
Mortgage refinance rates are influenced by outside economic factors and your personal financial profile. When it comes to economics, the most important variables include Federal Reserve policy, inflation, and housing inventory. The bond market, and especially the performance of the 10-year U.S. Treasury Note, plays a key role in determining current mortgage rates. When the yield on the Treasury Note increases, mortgage interest rates generally rise as well.
In times of high inflation, mortgage rates often climb, but when inflation is in check, you might see interest rates drop. The Fed’s monetary policy and the bond market also play parts in this financial symphony. Knowing more about these factors can help you feel educated to make the best decisions about refinancing your mortgage.
Don’t forget to consider your own financial scenario. Having a strong credit score — which is determined by such factors as your history of on-time payments, your credit utilization ratio, and your credit mix (like, having managed any installment loans and credit lines you hold responsibly) — is a definite asset when you apply for a mortgage refi.
How Interest Rates Affect Home Affordability
Looking to refinance your mortgage? Interest rates in Indiana are sure to play a major role in what you can afford to do. Your monthly payment will be based on the loan amount, the term of the loan, and the interest rate you’re offered. For example:
A $200,000 home loan with a 6.00% interest rate and a 30-year term will require a monthly payment of $1,199. But the exact same loan with an 8.00% interest rate would give you a monthly payment of $1,467.
| Interest Rate | Monthly Payment | Total Interest |
|---|---|---|
| 6.00% | $1,199 | $231,677 |
| 6.50% | $1,264 | $255,085 |
| 7.00% | $1,330 | $279,021 |
| 7.50% | $1,398 | $303,403 |
| 8.00% | $1,467 | $328,309 |
Secure a lower interest rate and you can save tens of thousands of dollars over your loan term, which could seriously impact your financial state. It could also play a role in achieving long-term goals like starting your own business or financing your child’s college tuition.
Why You Should Refinance Your Mortgage in Indiana
Refinancing your mortgage offers a number of benefits, depending on the financial goals you have. If current interest rates are lower than what your existing mortgage has, refinancing can most likely reduce your monthly payments and save you money over the loan’s life. Refinancing can help you switch, too, from an adjustable-rate mortgage to one with a fixed rate for savings in the long run. Another great approach is to refinance a 30-year mortgage to a new 15-year term, which can save you a lot of money in the long run.
Remember that refinancing a mortgage will almost always involve closing costs. A no-closing-cost refinance sounds like a real find, but they are often too good to be true — those charges will probably get rolled into the new mortgage, or you’ll pay a higher interest rate.
Whatever your reason for wanting to do it, you should have 20% equity or more in your home before you push play on a refinance, especially if you want to cash out some of your equity.
Common Reasons to Refinance a Mortgage
These are some of the more common goals of homeowners who refinance their mortgages:
• Qualifying for a lower interest rate thanks to improved credit or market conditions.
• Adjusting the repayment term to make monthly payments more manageable, or to pay off the loan more swiftly.
• Tapping into home equity in order to fund significant expenses, like a home remodel.
• Wanting to switch to a fixed-rate loan, since an adjustable-rate mortgage reset is coming soon.
• Wanting to get mortgage insurance out of your life when you have an FHA loan and 20% equity.
• Considering a debt consolidation, or releasing a cosigner.
Recommended: How Soon Can You Refinace a Mortgage?
How to Get the Best Refi Interest Rate
Your financial history always has an impact on interest rates that lenders offer you in Indiana. Homeowners with strong credit and low debt-to-income ratio may secure lower rates than those with less-ideal profiles.
To secure a competitive mortgage refinance rate, here’s what you should work on:
• Bolster your credit score by paying your bills on time and steering clear of new debt.
• Maintain a debt-to-income ratio under 36%.
• Explore offers from multiple lenders.
• Think about buying mortgage discount points to lower your interest rate.
Once you’ve achieved an optimal credit history, it’s time to deep-dive into rate trends.
Examining Trends in Indiana Mortgage Interest Rates
No one can predict with certainty where rates are headed at any given moment, but by understanding where they’ve been, you’ll be better equipped to make a decision right for you.
Historical U.S. Mortgage Interest Rates
Here’s a longer view of national mortgage rates. You can see that rates in the early 2000s were at around 6.00%. In 2020, they dropped lower, to under 3.00%. This decrease planted the idea in people’s minds that low rates were “normal.” In 2023, however, they rose again. Soon they were hitting around 7.00%.
A lot of people today complain about high interest rates. Current mortgage refinance rates, however, remain below the 50-year average.
Historical Interest Rates in Indiana
Below, compare Indiana and U.S. nationwide rates from 2000 to 2018 — they’re similar but not identical. (The Federal Housing Finance Agency stopped compiling state averages after 2018.)
| Year | Indiana Rate | National Rate |
|---|---|---|
| 2000 | 8.13 | 8.14 |
| 2001 | 7.08 | 7.03 |
| 2002 | 6.67 | 6.62 |
| 2003 | 5.97 | 5.83 |
| 2004 | 5.89 | 5.95 |
| 2005 | 5.97 | 6.00 |
| 2006 | 6.67 | 6.60 |
| 2007 | 6.55 | 6.44 |
| 2008 | 6.14 | 6.09 |
| 2009 | 5.39 | 5.06 |
| 2010 | 5.01 | 4.84 |
| 2011 | 4.97 | 4.66 |
| 2012 | 3.71 | 3.74 |
| 2013 | 4.05 | 3.92 |
| 2014 | 5.24 | 4.24 |
| 2015 | 4.01 | 3.91 |
| 2016 | 3.86 | 3.72 |
| 2017 | 4.19 | 4.03 |
| 2018 | 4.75 | 4.57 |
Choose the Right Mortgage Refi Type
The type of mortgage refinance you choose will influence the interest rate you’re offered. Some refi loans trend higher or lower, and that’s good to keep in mind when considering refinancing options.
Conventional Refi
A conventional mortgage refinance, also known as a rate-and-term refinance, is a popular choice for homeowners who want to enhance their mortgage terms. These refis often carry higher rates than government-backed loans such as FHA, VA, or USDA, but they provide increased flexibility and potential to waive PMI, or private mortgage insurance, if you have at least 20% in home equity. This type of refinance is an excellent option for a homeowner aiming to reduce an interest rate or adjust their loan term. Two types of conventional refis are a 15-year term refi and and adjustable-rate refi:
15-Year Mortgage Refi
Now, let’s talk about a 15-year mortgage refinance. This option can really be a game-changer. It will help you cut down the total interest you’ll pay over the loan’s life, even though you’ll have higher monthly payments.
On a 30-year, $1 million loan at a 7.50% rate, for instance, you’d be looking at a monthly payment of around $6,992 and a whopping $1,517,167 in total interest over the life of the loan. If you refinanced to a 15-year term at a 7.00% rate, you would see your monthly payments rise to about $8,988 — but the total interest would drop to roughly $617,891, saving you close to $900,000 in interest.
Shorter loan terms save you money in a couple of ways: by reducing the time you’re paying interest on the loan, and by offering slightly lower interest rates than loans with longer terms do.
Adjustable-Rate Mortgage Refi
Adjustable-rate mortgages (ARMs) usually start with a lower interest rate than fixed-rate loans, but the rate changes over time. If you plan to move before the rate adjusts, an ARM may be a good option for you. In the short term, you can save on monthly payments and get the financial breathing room to set sights on your next home.
Cash-Out Refi
Cash-out refinances are a popular way to leverage home equity. This type of loan can put a lump sum in your hands that you can use for a range of financial needs, from home improvements to consolidating high-interest debt. Here’s one example: Your home is worth $500,000 and your current mortgage balance is $300,000, so you have $200,000 in equity. A lender may allow you to borrow up to 80% of your equity. In that case, you’d be left with $100,000 after you paid off your existing mortgage. This can be a great approach to tackling debt or financing a big-ticket item.
FHA Refi
FHA loans are insured by the Federal Housing Administration, and often come with lower interest rates, making them attractive for refinancers. If you have an FHA loan already, you can opt for an FHA Simple Refinance or an FHA Streamline Refinance to potentially lower your rate. If you don’t have an FHA loan, options include an FHA cash-out refinance or an FHA 203(k) refinance, which is designed for home renovations and repairs. By choosing one of these alternatives, you can get financial flexibility and possibly lower monthly payments.
VA Refi
VA loans, backed by the Department of Veterans Affairs, are known for offering some of the most competitive interest rates in the mortgage market. If you want to qualify for a VA refinance, also known as an Interest Rate Reduction Refinance Loan (IRRRL), you’ll need to have an existing VA loan. This type of refinance can lower your monthly payments and remove the need for private mortgage insurance for eligible veterans and their families.
Compare Mortgage Refi Interest Rates
To ensure you’re getting the best deal, you’ll want to compare rates from multiple lenders in Indiana. In fact, it’s smart to look beyond interest rates to the annual percentage rate (APR).
APR is a handy equation that incorporates both fees and any discount points you’ve got. Calculate the total loan cost, as well as your break-even point (that is, how long it takes for the money you save to cancel out the out-of-pocket cost of the refinance). Keep an eye on your credit score and your home’s value — the higher they are, the more favorable rates you’ll receive offers for. Don’t forget to peruse local refinance rates for the best deal.
How Can You Get the Best Available Mortgage Refi Interest Rate?
Knowing refinance rates will be crucial for homeowners in Indiana who are looking to secure a competitive mortgage rate. Follow these tips:
• Compare rates from multiple lenders.
• Get prequalified — it can let you see your borrowing power and rates without triggering a hard credit check.
• Compare APRs vs. interest rates, which include interest costs, fees, and discount points.
• Evaluate and crunch the numbers to see if lower rates will trigger higher long-run costs.
• Use a calculator to estimate your savings.
💡 Quick Tip: Wondering how to refinance a mortgage? The process, which takes around 30 to 45 days, is similar to when you got your original home loan.
Online Refinance Calculators
An online refinance calculator can be helpful. It will give you an idea of what your new monthly payment could be, and help you compare different refinance options. These calculators take into account your current loan balance, the interest rate on a potential new loan, and the repayment term, giving you an estimate of how much you could save by refinancing. You can also use it to see how long it would take to recoup your mortgage refinancing costs.
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 is a powerful tool to help you manage your home loan and achieve financial goals. Whether you hope to lower your interest rate, access home equity, or shorten your loan’s term, understanding the different refinance options is key. If you improve your credit score, lower your debt-to-income ratio, and compare offers from multiple lenders, you can secure the best available mortgage refinance rates in Indiana. Just consider the long-term financial implications and make sure that the savings justify the costs involved.
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
When is mortgage refinancing a smart idea?
When you can lock in a lower interest rate, consolidate your debt, or meet other important financial goals, a mortgage refi might be a good financial decision. Do the math and figure out at what point the cash you’ll save after your refi will exceed the money you’ll spend on the refi itself. How long will you stay in your home? If you’ll end up moving before you’ve recouped the cost of your refi, it won’t make sense.
Can I draw cash out of my house without refinancing?
You can tap into your home’s equity to get money without a refinance. Request a home equity line of credit (HELOC), or take out a home equity loan. These options can all be great ways to pay for home improvements, consolidate debt, or cover other pop-up expenses. Technically, a HELOC or home equity loan is a second mortgage (assuming you still have your first one). It’s important to find the most competitive interest rate during the application process.
Is it possible to lower my interest rate without refinancing?
It’s hard to lower a mortgage interest rate without a refinance. You can reduce your monthly payment, though, by doing a mortgage recast. This move involves making a lump-sum payment toward your principal balance. Your lender can then “recast” your monthly payment amount. If you are facing financial hardship, you can also ask your lender about a loan modification. But lenders tend to suggest a refi or a recast first.
Are refinance rates going to drop anytime soon?
There’s no crystal ball that predicts future mortgage rates, but look at key indicators and you may 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 future. Keep an eye on the current refinance rates in Indiana so you’ll know when the time is right to refinance.
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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