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Compare mortgage refinance rates in Iowa.
Key Points
• The current mortgage refinance rates in Iowa are influenced by economic factors such as the bond market, housing inventory, and the overall economy.
• A mere 1% drop in your mortgage refinance rate for a $300,000, 30-year, fixed-rate loan can translate to savings of almost $200 a month.
• To lock in the best Iowa refinance rates, work on building your credit score, lower your debt-to-income ratio, and review multiple options from a variety of lenders.
• Switching from a 30-year mortgage to a 15-year term may slash the total interest you pay, though your monthly bills may be higher.
• FHA loans, backed by the Department of Housing and Urban Development, frequently come with more attractive mortgage refinance rates and may be available to people with credit ratings lower than other lenders accept.
• There are no strict limits on how often you can refinance, but it’s a good idea to weigh the costs and potential impact on your credit score before making a decision.
Intro to Mortgage Refi Interest Rates
Getting a mortgage refinance is like hitting the reset button. You replace your current home loan with a new one, letting you change the conditions of your loan, including the interest rate.
The specific type of refinance that makes sense for you will depend on why you want to refinance and will affect the interest rate available to you. This guide will help you understand how mortgage refinance rates are set and how you can get the best rate for your situation.
💡 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 mortgage refi interest rates come from?
The mortgage refinance rates available to you are the product of economic conditions and your personal financial situation.
The strongest indicator of the direction mortgage interest rates are going has historically been the bond market — specifically the performance of the 10-year U.S. Treasury Note. When the note’s rates go up, mortgage interest rates also tend to rise.
The housing market also plays a key role. When it cools and available homes outnumber potential buyers, lenders may lower rates. The state of the overall economy is also significant: A strong job market and healthy economic growth may result in rising rates, while a recession is usually accompanied by lower interest rates.
Keeping an eye on these moving parts and maintaining a good credit rating can help you time your refinance for the most favorable terms.
How Interest Rates Affect Home Affordability
Remember how important your interest rate was when you got your original mortgage? It’s just as important for your refi loan. Your new interest rate will be a big factor in determining how much you’ll pay each month, so it’s critical to be aware of current mortgage rates.
Your payment is based on your loan amount, the interest rate, and the length of your loan. For example, a $200,000 loan with a 6.00% rate and a 30-year term would have a monthly payment of $1,199. That same loan with an 8.00% rate would have a monthly payment of $1,468. But the lower rate would also save you almost $100,000 in interest over the life of the loan. It’s important to weigh short-term and long-term savings as you make your decision — and to pay attention to how much difference even a small change in your interest rate can mean over time.
| 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 |
Bear in mind, too, that in addition to your monthly payments, you’ll need to budget for mortgage refinancing costs, which are generally similar to the closing costs you paid on your existing mortgage.
💡 Quick Tip: Wondering how to refinance a mortgage? The process, which takes about 30 to 45 days, is similar to when you got your original home loan.
Why Refinance in Iowa?
There are several financially strategic reasons you might want to refinance your mortgage. For instance, if current interest rates dip lower than your existing mortgage, it might be a good time to refinance. Refinancing can help you secure a lower mortgage refinance rate, change your repayment term, or access cash from your home equity. It can also help you switch from an adjustable-rate to a fixed-rate loan, providing more financial stability.
Your motivation for the refi determines in part what kind of refi it makes sense to choose, and that, in turn, influences the rates available to you. Ideally, you’ll want to have at least 20% equity in your home before you refinance, especially if you’re cashing out some equity.
Common Reasons to Refinance a Mortgage
Here are some of the key reasons why homeowners decide to get a mortgage refinance:
• To get a lower interest rate or better terms than their original home loan came with.
• To adjust their repayment term: A longer term means paying lower monthly payments but more interest over time. A shorter term gets the homeowner debt-free more quickly and reduces the amount of interest they’ll pay over the life of the loan.
• To cash out home equity: Homeowners can borrow against the amount of money they’ve already invested in their home.
• To protect the homeowner from the potential rate hikes of an adjustable rate mortgage by switching to a fixed-rate loan.
How to Get the Best Available Mortgage Refi Interest Rate
Follow these steps to improve your chances of securing the best current mortgage refinance rates in Iowa.
• Pay your bills on time to help build a strong credit rating.
• Lower your debt-to-income ratio.
• Know what’s standard in your area by comparing rates and fees from multiple lenders.
• Consider purchasing mortgage points, also known as discount points.
• Select a shorter loan term, which typically comes with better rates.
💡 Quick Tip: 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.
Trends in Iowa Mortgage Interest Rates
The landscape of mortgage rates has seen its share of shifts. Take the 30-year fixed mortgage. In 2021, the national average dropped as low as 2.67%. Fast forward to 2023, and it had climbed to a hefty 6.95%. The good news? A rise in home values across Iowa has bolstered homeowners’ equity, opening the door to cash-out refinance opportunities for a variety of needs.
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 Iowa
Reviewing long-term trends in U.S. mortgage rates can help give you perspective on current rates. As you can see from the chart below, it’s unusual for rates to drop below 5.00% or rise above 10.00%.
| Year | Iowa Rate | National Rate |
|---|---|---|
| 2000 | 8.20 | 8.14 |
| 2001 | 7.03 | 7.03 |
| 2002 | 6.65 | 6.62 |
| 2003 | 5.80 | 5.83 |
| 2004 | 5.85 | 5.95 |
| 2005 | 5.91 | 6.00 |
| 2006 | 6.57 | 6.60 |
| 2007 | 6.52 | 6.44 |
| 2008 | 6.19 | 6.09 |
| 2009 | 5.15 | 5.06 |
| 2010 | 4.92 | 4.84 |
| 2011 | 4.81 | 4.66 |
| 2012 | 3.70 | 3.74 |
| 2013 | 3.99 | 3.92 |
| 2014 | 4.36 | 4.24 |
| 2015 | 4.15 | 3.91 |
| 2016 | 4.03 | 3.72 |
| 2017 | 4.34 | 4.03 |
| 2018 | 4.92 | 4.57 |
Compare Iowa Interest Rates by Mortgage Refi Type
You probably know that refinance rates can be a bit higher than original mortgage rates. But did you know that interest rates can vary depending on the type of mortgage refinance you choose? There are a number of mortgage refinance options available, each with its own unique features and benefits. Understanding your options lets you select the mortgage refinance that will best fit your needs. For example, while conventional refis often have higher rates than government-backed loans, they may offer more flexibility in terms of loan amount and repayment term.
Conventional Refi
A conventional refinance, also known as a rate-and-term refinance, can be a useful option for homeowners looking to lower their mortgage refinance rate. While the rates are typically higher than government-backed loans like FHA, VA, and USDA loans, a conventional refinance can be a good choice for homeowners who want to change their interest rate or loan term but who can’t or don’t want to meet the extra requirements of government-backed loans.
15-Year Mortgage Refi
A 15-year mortgage refinance can be an effective way to reduce the total interest you pay over the loan’s lifetime, although your monthly payments will be higher. A 30-year, $1 million loan at a 7.50% rate has you paying about $6,992 a month and $1,517,172 in interest overall. But refinance to a 15-year plan at 7.00%, and your monthly payment jumps to around $8,988. The good news? You’ll only pay about $617,891 in interest, saving you close to $900,000.
Adjustable-Rate Mortgage Refi
Adjustable-rate mortgages (ARMs) typically start with a lower mortgage refinance rate than fixed-rate loans, but that rate can change over time. If you’re planning to move before the rate is scheduled to adjust, refinancing from your fixed mortgage to an ARM can help you save money with lower initial monthly payments.
Cash-Out Refi
A cash-out refinance allows you to leverage the home equity you’ve built by taking out a new mortgage for more than you currently owe. The difference is paid to you in cash, and you can use the money for home improvements, debt consolidation, or other financial needs. For example, if your home is worth $500,000 and you still owe $300,000 on your mortgage, you have $200,000 in equity. Lenders generally allow you to borrow up to 80% of your home value: $500,000 x 80% = $400,000. After paying off your mortgage, you’re left with $100,000 to use however you like.
FHA Refi
FHA loans, backed by the United States Department of Housing and Urban Development, often come with more favorable mortgage refinance rates than conventional loans. These FHA Simple Refinances and FHA Streamline Refinances are available to homeowners who already have an FHA loan. If you don’t have an FHA loan, you can still explore two other options: an FHA cash-out refinance or an FHA 203(k) refinance, which is specifically for renovation or rehabilitation projects.
VA Refi
VA loans, guaranteed by the United States Department of Veterans Affairs, consistently offer some of the most competitive mortgage refinance rates available. In order to qualify for a VA refinance, formally known as an Interest Rate Reduction Refinance Loan (IRRRL), you must have an existing VA loan. The IRRRL is designed to help you lower your monthly payments or transition from an adjustable-rate to a fixed-rate mortgage.
How to Compare Mortgage Refi Interest Rates
Getting a competitive mortgage refinance rate can save you money over the life of the loan. Even a small difference can add up to thousands in extra interest you’ll end up paying. These tips can help you secure a competitive rate:
• Compare rates from multiple lenders to find the best deal.
• In addition to interest rates, look at the annual percentage rate (APR), which includes interest, fees, and discount points.
• Compare current rates to your existing one, and watch the trends to assess whether refinancing is a good move and when.
• Consider both your monthly budget and the long-term financial impact of your refi to assess how it fits into your financial goals.
Online Refinance Calculators
Using a reliable mortgage calculator lets you get a rough idea of what you might be able to save with a refi. It can help you get an estimate for your new monthly payment and compare different refinance options. You can also see how changing the refinance rate, loan term, and loan amount can impact your finances. By plugging in your current mortgage details and the terms of any new mortgage you’re considering, you can get a better idea of whether refinancing makes sense for you.
You can also use a calculator to estimate how much equity is in your home.
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 smart financial move, but it requires careful thought. Whether you want to get a lower rate with your mortgage refinance, tap into your home’s equity, or switch to a different type of mortgage, you’ll need to understand the different refinance options available to you and the specific requirements for each. By working to improve your credit score, lowering your debt-to-income ratio, and shopping around with multiple lenders, you can find the right refinance option for 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
How much does 1% lower your monthly payment?
You’d be surprised at how much a small reduction in your mortgage rate can affect your monthly payment. Let’s say you have a $300,000 mortgage at an interest rate of 7.00%. If you’re able to secure a 1% reduction, bringing the rate down to 6.00%, you could see your monthly payment drop by close to $200.
Can I ask my lender to lower my mortgage interest rate?
You can always talk to your lender about lowering your rate. They might not say yes, but if you have a good credit score and a history of on-time payments, they may be more likely to agree.
Can I get a home equity loan without refinancing?
There are two ways to tap into your home’s equity without affecting your current mortgage rate. A home equity line of credit (HELOC) or a home equity loan can help you access the equity you’ve built in your home without having to refinance your entire mortgage.
Does refinancing affect your credit score?
The process of refinancing can cause a temporary decrease in your credit score because it involves a hard credit check and the opening of a new account. However, the impact is generally minimal and should be short-lived.
Do you have to pay closing costs when you refinance?
When you refinance your mortgage, you’ll have to pay closing costs again. These costs cover the various fees and expenses associated with processing your new mortgage loan. Typically, refi closing costs can range from 2% to 5% of the total loan amount.
How often can you refinance your home?
There are no set limits on how many times you can refinance your home, but it’s important to consider refinancing costs and potential impacts on your credit. Even if you’re eager to take advantage of current mortgage refinance rates in Iowa, keep in mind that refinancing isn’t always the best option, and review all the pros and cons carefully before moving forward.
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*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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