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Compare mortgage refinance rates in Montana.
Key Points
• Mortgage refinance rates are influenced by a variety of economic factors, including Federal Reserve policy, inflation, the bond market, and housing inventory levels.
• Credit scores can also play a role, with higher scores earning lower interest rates.
• Did you know that a mere 1% dip in your mortgage refinance rate could translate to substantial monthly savings and add up to thousands of dollars over the loan’s lifetime?
• In Montana, mortgage refinance rates have historically been very close to the national average, so it’s worth keeping an eye on the market to time your refinance just right.
• If you qualify, FHA and VA loans can offer lower mortgage refinance rates than conventional loans, and can be a great option for many homeowners.
• The closing costs for a mortgage refinance usually fall between 2% to 6% of the loan amount, so be sure to consider this when making your decision.
Introduction to Mortgage Refinance Rates
A mortgage refinance is like hitting the reset button on your mortgage. It’s a chance to swap out your old terms for new ones, potentially scoring a lower rate in the process. You use the new loan to pay off the old one. Whether you’re after lower monthly payments, a shorter loan term, or cash in hand, the type of refi you opt for will play a big role in the rate you secure. This guide is your ticket to understanding how these rates are determined and how to snag the best one out there.
💡 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.
Where Do Mortgage Refinance Interest Rates Come From?
When you refinance a home loan, the interest rates available are the result of a complex interplay of economic conditions and personal financial factors.
From the broader economic perspective, Federal Reserve policy, inflation, the bond market, and housing inventory levels all play a role. In general, higher inflation and federal funds rate hikes tend to push mortgage refinance rates up, while a strong bond market can pull them down. When housing inventory is tight and prices climb, you may also see rates tick up.
By keeping an eye on these factors, you can gain a better understanding of the potential direction of rates, which can help you decide when to refinance and what kind of rate you might be able to get.
How Interest Rates Affect Home Affordability
Interest rates play a huge role in the affordability of your mortgage refinance. The rate you secure will directly impact your monthly payments.
Here’s an example:
• On a $200,000 loan, a 6.00% interest rate over a 30-year term would mean a monthly payment of $1,199.
• If that rate were 8.00%, you’d be looking at a monthly payment of $1,467.
Here’s the important part: Over the life of the loan, that seemingly small percentage difference could add up to nearly $100,000 in savings. So even a fraction of a percentage point can make a big difference in your bottom line.
Why Refinance in Montana?
Refinancing your mortgage can be a smart move, depending on your financial goals. If current interest rates are lower than your existing mortgage, refinancing can reduce your monthly payments and save you money over the loan term.
A note in terms of how soon you can refinance: You’ll need at least 20% equity in your home, especially if you’re cashing out equity. And don’t forget that there will be closing costs, typically 2% to 6% of the loan amount, to contend with.
Common Reasons to Refinance a Mortgage
Here are some of the reasons why you may want to refinance a home loan in Montana:
• You’ve found a better mortgage refinance rate, thanks to having built your credit or favorable market conditions.
• You’re considering adjusting your repayment term to better suit your financial goals.
• You may need to tap into your home equity for expenses like education or home improvements.
• Your adjustable rate is about to change, and you want to switch to a fixed-rate loan for peace of mind.
• You have an FHA loan and 20% equity, and you want to eliminate your FHA mortgage insurance premium.
💡 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.
How to Get the Best Available Mortgage Refi Interest Rate
To snag a competitive mortgage refinance rate, there are a few key steps.
• First, work to build your credit score by being diligent with paying your bills on time, every time, and steering clear of new debt.
• Keep that debt-to-income ratio (a key metric that lenders look at when you seek approval) under 36%.
• Shop around like a pro, comparing interest rates and fees from a handful of lenders. This isn’t a moment for “one and done” thinking.
• Consider discount points, also referred to as mortgage points. This involves paying more upfront to “buy down” your rate. That lower rate, in turn, can translate into a lower monthly payment and less interest paid over the life of the loan.
Understand Trends in Montana Mortgage Interest Rates
Changes in mortgage rates are driven by a variety of factors, including Federal Reserve policy, inflation, and the bond market, as mentioned above (and your financial credentials, too). If you’re thinking of refinancing, it can be a smart move to keep an eye on the broader trends in the U.S. mortgage market, so you can make the best decision about when to refinance your mortgage.
Historical U.S. Mortgage Interest Rates
Refinance rates have changed significantly over the years. In 2021, the average 30-year fixed mortgage refinance rate was 3.15%. In 2023, that rate had jumped to 7.00%. While many hoped that rates would drop late in 2024 and into 2025, current mortgage rates have not fallen as yet.
It can help to consider both the big picture of mortgage rates over the years, as well as emerging trends. For example, while a 7.00% interest rate may sound high after those historic lows of 2020 and 2021, did you know that interest rates for home loans hit almost 20% early in the 1980s? That can help take the edge off frustration with the current climate, with an interest rate drop not yet happening. Here’s a graph showing you how rates have evolved over several decades.
Historical Interest Rates in Montana
Montana’s mortgage refinance rates tend to mirror national trends, but with some local variation. Take a look at how the rates have compared for almost two decades in the chart below. (Note that the Federal Housing Finance Agency stopped tracking these numbers in 2018, so the chart ends with that year.)
| Year | Montana Rate | National Rate |
|---|---|---|
| 2000 | 8.10 | 8.14 |
| 2001 | 6.92 | 7.03 |
| 2002 | 6.59 | 6.62 |
| 2003 | 5.74 | 5.83 |
| 2004 | 5.64 | 5.95 |
| 2005 | 5.76 | 6.00 |
| 2006 | 6.50 | 6.60 |
| 2007 | 6.40 | 6.44 |
| 2008 | 6.01 | 6.09 |
| 2009 | 4.97 | 5.06 |
| 2010 | 4.79 | 4.84 |
| 2011 | 4.55 | 4.66 |
| 2012 | 3.58 | 3.74 |
| 2013 | 3.85 | 3.92 |
| 2014 | 4.17 | 4.24 |
| 2015 | 3.88 | 3.91 |
| 2016 | 3.73 | 3.72 |
| 2017 | 4.05 | 4.03 |
| 2018 | 4.66 | 4.57 |
Choose the Right Mortgage Refi Type
Now that you have a good understanding of what determines rates and how they have fluctuated over time, take a look at the different types of mortgage refinances available, so you can determine which is best for your situation and your goals.
Conventional Refi
A conventional refinance, also known as a rate-and-term refi, is a popular choice for many homeowners. These loans typically feature higher mortgage refinance rates than government-backed loans such as FHA, VA, or USDA (but not everyone qualifies for those loans).
Opt for a conventional refi if you’re aiming to reduce your interest rate or adjust your loan term. You’ll need a certain credit score (usually 620 or higher) and a solid chunk of equity in your home, usually around 20%. The potential savings on monthly payments and overall interest over the loan’s life can be a financial boost.
Cash-Out Refi
With a cash-out refinance, you can leverage your home equity by borrowing a portion of it as a lump sum. In most cases, the interest rates for cash-out refis are slightly higher than those for traditional refinances, but the cash can be a game-changer for various financial needs, like home improvements or consolidating high-interest debt. For example, if your home is valued at $500,000 and your current mortgage balance is $300,000, you have $200,000 in equity. A lender might let you borrow up to 80% of that equity, which would leave you with $100,000-plus after paying off your existing mortgage.
15-Year Mortgage Refi
If you’re considering refinancing from a 30-year to a 15-year mortgage, here’s a nugget of wisdom: The long-term savings are worth the higher monthly payments, if you can swing them. Here’s an example:
• On a $1 million home loan at a 7.50% rate, your 30-year term would have you paying around $6,992 monthly and a staggering $1,517,167 in total interest.
• If you refinance to a 15-year mortgage, the monthly payment jumps to about $8,988, but the total interest paid plummets to roughly $617,891, saving you close to $900,000 compared to the 30-year plan.
While a shorter term isn’t for everyone, it can be a great way to save on interest over the life of the loan if you can swing it.
Adjustable-Rate Mortgage Refi
With an adjustable-rate mortgage (ARM), you start with a lower initial mortgage refinance rate than a fixed-rate loan, but your rate can rise or fall with the market. If you don’t plan on staying in your home for the long haul, an ARM could be a cost-effective way to refinance. You’ll be gone before the rate can go up.
But it’s important to understand the potential for rate increases and how they could affect your monthly payments and overall financial plan. What if your plans to relocate fall through, and you wind up stuck with that higher payment? You may want to talk with a financial advisor to see if an ARM makes sense for your financial goals and risk tolerance.
FHA Refi
FHA loans are backed by the Federal Housing Administration. They often offer lower mortgage refinance rates, sometimes a full percentage point lower than conventional loans. While certain FHA refis are exclusive to those with an existing FHA loan, such as FHA Simple Refinances and FHA Streamline Refinances, there are other options for those without. You might consider an FHA cash-out refinance or an FHA 203(k) refinance, tailor-made for home renovation and rehabilitation projects. These options are designed to be flexible and meet a range of homeowner needs.
VA Refi
Backed by the United States Department of Veterans Affairs, VA loans 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 have an existing VA loan. This type of refinance can potentially lower your monthly payment and the total amount of interest paid over the life of the loan, making it a great option for qualified active-duty members of the military, veterans, and possibly their families.
Compare Mortgage Refi Interest Rates
Comparing mortgage refinance rates can help you secure a competitive rate and save money. Here are some tips:
• Shop around with multiple lenders to see what rates and fees they offer.
• When you’re comparing, look at the annual percentage rate (APR), which factors in interest, fees, and discount points, vs. just the interest rate.
• Look at the big picture, including closing costs. Crunch the numbers and make sure you’re coming out ahead with the break-even point. That’s defined as how long it takes for the savings delivered by the new loan to equal the cost of refinancing, including closing costs and fees.
Use an Online Refinance Calculator
Did the phrase “crunch the numbers” above make you cringe? Don’t worry; tech tools can help. Online refinance calculators are a great way to get an estimate of what your monthly payments might be and to compare different refinance options. These calculators take a number of factors into account, including your current loan balance, the new mortgage refinance rate, and any closing costs. This can give you vital intel and help you decide if refinancing makes financial sense 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 savvy financial move, but it can require a bit of education and research. Whether you’re looking to lower your monthly home loan payments, change your mortgage term, or tap into your home’s equity, it’s important to understand the different types of refinances and what each requires. It can also be a good move to shop around with multiple lenders so you find the best mortgage refi type and rate to help you achieve 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
Are refinance rates falling?
As of March 2025, mortgage refi rates were holding steady. Many had hoped they would drop in late 2024 or at the start of the new year, but so far, the Fed has not cut rates, and so lenders are not lowering their interest numbers. It’s wise, though, to check online for fluctuations; mortgage rates do ebb and flow.
Can I refinance when rates are low?
You absolutely can refinance your mortgage when interest rates are on the decline. That can help you save money on your monthly costs and the overall interest you pay. It’s a good idea to weigh the financial implications to ensure the potential savings are worth the costs. Refinancing comes with fees and closing costs, so you’ll want to calculate your break-even point to see if the long-term benefits are worth the upfront investment.
How much does 1 percent lower your monthly mortgage payment?
Even a 1% decrease in your mortgage refinance rate can make a big difference in your monthly payment. For example, a $300,000, 30-year loan at a 7.00% interest rate has a monthly payment of $1,996. If you could refinance at 6.00%, your monthly payment would drop to $1,827. That’s a savings of $170 per month. This could free up cash for other expenses or 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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How to Refinance a Home Mortgage Loan
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7 Signs It’s Time for a Mortgage Refinance