MINNESOTA MORTGAGE REFINANCE RATES TODAY
Current mortgage refinance rates in
Minnesota.
Current mortgage refinance rates in
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Compare mortgage refinance rates in Minnesota.
Key Points
• Mortgage refinance rates in Minnesota are influenced by a variety of economic factors, including the bond market, housing inventory, and inflation.
• Even a 1% rate drop achieved by refinancing your mortgage can translate to serious monthly and long-term savings. You may be able to lower your payments by hundreds of dollars each month.
• In recent years, Minnesota refinance rates have experienced significant shifts, climbing from 3.15% in 2021 to 7.00% in 2023, before leveling out.
• By refinancing your home mortgage from a 30-year term to one of 15 years, you slash the interest you pay over the loan’s lifetime. You could potentially save almost $900,000 on a $1 million loan — as long as you can take on higher monthly payments.
• A refi can potentially lower your monthly payment. It can also give you access to home equity or help you switch to a fixed-rate loan from one with a variable rate.
• Building a better credit score, balancing your debt-to-income ratio, and comparing offers from multiple lenders will help you snag the most favorable mortgage refinance rates in Minnesota.
Introduction to Mortgage Refinance Rates
To start: What exactly is a mortgage refinance? It is what you do to replace your current home loan with a new one. The new terms can be more favorable than those of your existing mortgage, and you may be able to lower your interest rate to boot.
Homeowners find a lot of different motivations for refinancing, in Minnesota and elsewhere. Perhaps you are looking to lower your monthly overhead, or maybe you want to tap some of your equity for a bathroom renovation.
This guide will help you understand how mortgage refinances work and how to get the best rates in today’s market, with a focus on factors that affect Minnesota homeowners.
💡 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.
Where Do the Rates Come From?
Mortgage refinance rates are influenced by an array of economic factors, as well as your personal financial profile. When it comes to economic factors, the most important considerations include Federal Reserve policy, inflation, and housing inventory. For instance, 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 rises, mortgage interest rates generally increase as well.
Don’t forget to consider your own personal financial profile. 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 (say, having responsibly managed installment loans and credit lines) is a definite asset when you apply for a mortgage refi.
How Interest Rates Affect Home Affordability
If you’re looking to refinance your mortgage, interest rates are sure to play a major role in what you can afford. Your monthly payment is based on the loan amount, the term of the loan, and the interest rate you are offered. For example:
A $200,000 loan with a 6.00% interest rate and a 30-year term will require a monthly payment of $1,199. The same home loan with an 8.00% interest rate has 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 |
A lower interest rate can save you tens of thousands of dollars over the loan term, which could have a big impact on your financial state. It could also play an important role in achieving your long-term goals, by helping you have enough money to, say, start your own business or finance the tuition for your child’s dream college
Why Refinance in Minnesota?
Refinancing your mortgage in Minnesota can be a smart move financially, but it does require some careful consideration. If current interest rates are lower than that of your existing mortgage, it might be a good time to go for it. Worth noting: You’ll typically want to have at least 20% equity in your home before going into a refi, especially if you plan to cash out equity.
How soon can you refinance a mortgage? It depends on a number of factors, including economics and your future plans.
Common Reasons to Refinance a Mortgage
These are some of the more common goals of homeowners who refinance their mortgages:
• Lower interest rates due to market changes or credit you’ve worked to build.
• A change in repayment term — either to move to lower monthly payments or to increase them for faster loan payoff.
• Cashing out home equity to help cover expenses like education or home renovations.
• A switch from an adjustable to a fixed-rate loan for more control, especially if it seems like rates are on the verge of rising.
• To eliminate FHA mortgage insurance on loans when you hit 20% equity.
How to Get the Best Mortgage Refi Interest Rates
Your financial history will impact your mortgage refinancing costs, including the interest rates lenders offer you. Minnesota homeowners with strong credit and favorable debt-to-income ratios are likely to secure lower rates. Here’s what you need to do if you’re preparing to apply:
• Build your credit score. Always paying bills and loan payments punctually.
• Reduce your debt-to-income ratio. If you get it down to 36% or less, it will pay off.
• Shop around with multiple lenders. That includes brick-and-mortar banks, credit unions, and online institutions. Always compare offers, and focus on the APR (which includes fees and closing costs) rather than just the interest rate.
• Ponder buying mortgage discount points.
• Grab the shortest loan term you can afford — 15 years will save you money over a 30-year term.
It’s also important to follow interest rate trends and have a sense of when they will rise or fall. Let’s start with a few things you should know before you go for it.
Understand Trends in Minnesota Mortgage Interest Rates
No one can predict with certainty where rates are headed, but if you understand where they have been, you’ll be better equipped to make a decision that is right for your situation.
Historical U.S. Mortgage Interest Rates
Here you can see a longer view of national mortgage rates. Rates in the early 2000s were around 6.00%. In 2020, they dropped to below 3.00%. This decrease cemented the idea in American minds that low rates were “normal.” Then in 2023, they rose again, hitting around 7.00%.
Many people today complain about high interest rates, but current mortgage refinance rates remain below the 50-year average.
Historical Interest Rates in Minnesota
Below, you can compare Minnesota and U.S. rates from 2000 to 2018 — they are similar but not identical. (The Federal Housing Finance Agency stopped compiling state averages after 2018.)
| Year | Minnesota Rate | National Rate |
|---|---|---|
| 2000 | 7.96 | 8.14 |
| 2001 | 6.88 | 7.03 |
| 2002 | 6.37 | 6.62 |
| 2003 | 5.46 | 5.83 |
| 2004 | 5.44 | 5.95 |
| 2005 | 5.62 | 6.00 |
| 2006 | 6.37 | 6.60 |
| 2007 | 6.29 | 6.44 |
| 2008 | 5.94 | 6.09 |
| 2009 | 4.95 | 5.06 |
| 2010 | 4.72 | 4.84 |
| 2011 | 4.45 | 4.66 |
| 2012 | 3.58 | 3.74 |
| 2013 | 3.85 | 3.92 |
| 2014 | 4.19 | 4.24 |
| 2015 | 3.86 | 3.91 |
| 2016 | 3.72 | 3.72 |
| 2017 | 4.01 | 4.03 |
| 2018 | 4.63 | 4.57 |
Choose the Right Mortgage Refinance Type
It’s no secret that refinance rates are sometimes higher than mortgage rates on a home purchase. But the rate you get can vary a lot depending on the variety of refinance you choose.
How to refinance your mortgage? Start by understanding your refi options.
Conventional Refi
Referred to as a rate-and-term refi or a conventional refi, this option tends to have a higher rate than government-backed loans like an FHA, VA, or USDA mortgage. This choice can empower you to adjust your interest rate and loan term, and possibly reduce your monthly payment or the time it takes to pay off the loan.
A conventional refinance is a great pick for a homeowner with significant equity and a solid credit history. By securing a lower rate with a mortgage refinance, you’ll save money over the term of your loan and reach your financial goals more swiftly. That’s a win-win.
15-Year Refi
A 15-year mortgage refinance can lead to big savings in the long run, even though monthly payments will go up. For example, if you’re carrying a 30-year, $1 million loan at a 7.50% mortgage refinance rate, you are responsible for a monthly payment of $6,992, and you can expect to pay a total interest amount of $1,517,167.
Say you refinance to a 15-year mortgage at a 7.00% rate. Your monthly payment will increase to approximately $8,988. But the total interest you’ll pay by the time the loan is finished will drop to $617,891. In the end, you would save nearly $900,000. That’s a lot of cash — and it’s a very nice feeling to be out from under a loan in a mere 15 years. Obviously, cash flow plays a critical role in whether you can go for something like this.
Adjustable-Rate Mortgage Refi
Adjustable-rate mortgages (ARMs) tend to start with lower mortgage refinance rates than fixed-rate loans do, but the rates often change over time. If you have a plan to sell your home before the rate adjusts, refinancing from a fixed-rate mortgage to an ARM will help lower your monthly payment and save you money in the near future. Key words, near future. If your plans may change, or even just stretch a little, think hard on this.
An adjustable-rate mortgage refi can be a good strategy if you have definite plans to sell your home or if you are confident that you will increase your income in the next few years.
Cash-Out Refi
A cash-out refinance lets homeowners unlock their property’s value by taking out a new mortgage for more than they owe. It’s like turning your home equity into cash — and you can use it for whatever you need, including paying off high-interest debt or making long-desired home improvements.
The amount you can borrow is generally based on the equity you have in your home. Perhaps your home is worth $500,000 and your mortgage balance is $300,000. In that case, you have $200,000 in equity in your property. With a cash-out refi, a lender may approve you to borrow up to 80% of that equity, which would leave you with a chunk of available cash ($100,000) after you pay off your existing mortgage. The lump sum could help you get rid of a weighty debt or finance major expenses.
FHA Refi
An FHA loan, which is backed by the Federal Housing Administration, can come with favorable rates — sometimes a full percentage point lower than that of a conventional loan. The different types of FHA mortgage refinance options include FHA Simple Refinance, FHA Streamline Refinance, FHA Cash-Out Refinance, and FHA 203(k) Refinance. The first two are only available to homeowners with existing FHA loans; the latter two are possible to qualify for whether you have an FHA loan or not.
VA Refi
VA loans are backed by the U.S. Department of Veterans Affairs. These refis offer some of the most competitive mortgage refinance rates available. To be eligible for a VA refinance, also known as an Interest Rate Reduction Refinance Loan (IRRRL), you must hold a current VA loan. This type of refinance may significantly reduce your monthly payments and let you accumulate substantial interest savings over your loan’s life if you qualify.
Compare Minnesota Mortgage Refinance Interest Rates
To get the best deal, it’s essential to compare rates from multiple lenders. Look beyond the interest rate to the annual percentage rate (APR). An APR incorporates fees and discount points, giving you a more complete picture of the cost and final figures of your mortgage loan refinance.
Take the time to calculate what your break-even point — when your refi savings cancel out the costs — will be, as well as your total loan cost. Take care of your credit score and your home’s current value. The higher they are, the more favorable rates you’re likely to be offered. And remember to monitor local refinance rates for favorable offers.
Online Mortgage Refi Calculators
Online refinance calculators are a helpful tool for figuring out what your new monthly payment will be, or to compare different refinance options. An online mortgage calculator can help you know exactly what you’ll need to pay each month, and understand the potential savings of refinancing. It will take into account your current loan balance, interest rate, and the terms of a new loan you qualify for. Using a refi calculator can help you weigh advantages and disadvantages, and make informed decisions about refinancing and if it’s right for you.
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 wise financial move. It can save you money through a lower interest rate or monthly payments, or by letting you tap into your home equity. It’s important, though, to consider the costs and benefits, and to think about how they align with your long-term financial goals. Whether you want to refinance to a 15-year mortgage, an adjustable-rate mortgage, or a cash-out refinance, understanding your options and getting your financial house in order can help you get the best rate and terms.
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 are refi closing costs?
Closing costs on a mortgage refinance typically fall between 2% to 5% of the loan amount. That means, on a $300,000 refinance, you’re looking at a range of $6,000 to $15,000. The final figure may vary depending on your location, loan type, and the lender you work with. To ensure you get the best deal, compare closing costs from different lenders. It could save you hundreds, if not thousands, of dollars.
Will refinancing ding your credit score?
Refinancing has been known to cause a temporary dip in your credit score. It triggers what is known as a hard inquiry, and adds a new account to your credit report. But this impact is usually short-lived. If you have a high credit score, the impact of refinancing might be barely noticeable.
Can I pull equity out of my house without a refinance?
It’s possible to pull equity out of your home without refinancing. You can use a home equity line of credit (HELOC) or a home equity loan to access it. Shop around for home equity lending rates to get the best deal for your financial situation.
How many times is it possible to refinance a home loan?
You can refinance your primary residence an unlimited number of times. However, with each refi, you’ll be looking at closing costs and some impact on your credit score. Definitely consider the potential benefits and drawbacks, and weigh your options according to your financial goals and circumstances.
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. ²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
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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