Key Points
• Mortgage refinance rates are affected by a variety of economic factors, including the 10-year U.S. Treasury Note, housing inventory, and inflation.
• A mere 1% drop in the refinance rate could translate to substantial savings on a home loan.
• Cash-out refinancing is a way for homeowners to tap into their home equity, but it typically comes with higher mortgage refinance rates than other refinance options.
• Refinancing to a 15-year mortgage can be a smart move, as it typically means paying less interest over the life of the loan, despite higher monthly payments.
• Closing costs are an important factor to consider. They generally fall between 2% and 5% of the loan amount.
Mortgage refinance is the process of replacing your existing home loan with a new one. The terms of the new mortgage can be different from the old mortgage. For example, the new mortgage may have a different interest rate, a different repayment term, or other features. The type of refinance you choose can affect your interest rate in Oregon. This guide will help you understand how refinance rates are set, and how you can get the best rate possible.
💡 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.
The strongest indicator of the direction mortgage interest rates are headed lies in the bond market, and specifically in the performance of the 10-year U.S. Treasury Note. When rates on the note rise, mortgage interest tends to rise too. Another factor is housing inventory. 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 rates to rise, while a recession usually means lower interest rates.
Your monthly payment hinges on your loan amount, the term over which you’ll repay it, and the mortgage refinance rate. If you took a $200,000 loan with a 6.00% interest rate and a 30-year term, your monthly payment would be $1,199. But if you could only get an interest rate of 8.00%, you’d be looking at a monthly payment of $1,467. Over the life of the loan, a lower interest rate would save you close to $100,000. Even a seemingly small rate change can lead to significant savings. The chart below shows additional payment amounts for that $200,000 loan.
| 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 |
Refinancing your mortgage is often a smart financial play, but it’s not a decision to be made lightly. If current mortgage rates are more attractive than what you’re currently locked into, it could be the perfect time to make a move. By refinancing, you could reduce your monthly payments and save a substantial sum over the life of your loan. With at least 20% equity in your home, you could even refinance to cash out some equity for a renovation project or other big expense — another reason that people refinance.
Refinancing also offers the opportunity to switch from an adjustable to a fixed rate, which could provide a more predictable monthly payment. And for some people, refinancing means trimming their repayment term so that they pay more each month, but repay the entire loan in less time (and with less interest overall).
For borrowers with an FHA loan (backed by the Federal Housing Administration) a refinance once they hit the 20% equity mark will help them eliminate an extra charge for the mortgage insurance premium.
Here are some basic steps you can take to ready your finances for a mortgage refinance:
• Pay bills on time to maintain a solid credit score.
• Aim to keep your debt-to-income (DTI) under 36%. To determine your current DTI, add up your monthly debts (car payment, student loan payment, etc.) and divide by your gross monthly income. Then multiply by 100.
• Assess your monthly budget and think whether you can handle larger payments. If so, you might seek a shorter-term mortgage for a lower rate.
• Examine your savings to determine whether you might be able to purchase discount points to lower your interest rate.
You’ll want to compare interest rates and fees from a few different lenders when you explore refinancing, so it helps you have a sense of what interest rates look like in Oregon..
The mortgage refinance rate environment in Oregon is similar to what you see across the country, with average interest rates in the state typically sitting just below the national average. Take a look at how they compare.
As you think about whether the mortgage rate available to you now in Oregon is a good bet for a refinance, it helps to have a sense of what rates have looked like over a long span of time in the United States. While it might be tempting to wait for rates to drop significantly, as the chart below shows, a rate below 5.00% is a fairly uncommon occurrence.
The mortgage refinance rate environment in Oregon is similar to what you see across the country, with average interest rates in the state typically sitting just below the national average. Take a look at how they compare.
| Year | Oregon Rate | National Rate |
|---|---|---|
| 2000 | 7.59 | 8.14 |
| 2001 | 6.86 | 7.03 |
| 2002 | 6.38 | 6.62 |
| 2003 | 5.55 | 5.83 |
| 2004 | 5.68 | 5.95 |
| 2005 | 5.78 | 6.00 |
| 2006 | 6.48 | 6.60 |
| 2007 | 6.41 | 6.44 |
| 2008 | 6.00 | 6.09 |
| 2009 | 4.96 | 5.06 |
| 2010 | 4.73 | 4.84 |
| 2011 | 4.54 | 4.66 |
| 2012 | 3.66 | 3.74 |
| 2013 | 3.85 | 3.92 |
| 2014 | 4.14 | 4.24 |
| 2015 | 3.84 | 3.91 |
| 2016 | 3.65 | 3.72 |
| 2017 | 3.94 | 4.03 |
| 2018 | 4.56 | 4.57 |
The type of mortgage refinance you opt for will have an impact on the rate you are offered and the overall cost of your loan. These are the more common types of refinance arrangements in Oregon.
A conventional home loan refinance, also known as a rate-and-term refinance, is a great option for homeowners looking to lower their interest rate, change the length of their loan term, or both. A conventional refinance has typically a higher rate than a government-backed refinance, but offers more flexibility. This is a good option if you have built up equity and have a good credit score. Two common types of conventional refi are the 15-year refinance and the adjustable-rate refinance.
Choosing a loan term that’s on the shorter side (15 or even 10 years) can lead to substantial interest savings over the loan’s lifetime, though it does mean making higher monthly payments. Borrowers who have the financial resources to make those larger payments might choose a 15-year mortgage refi to close out their loan before children go to college or before their own retirement years.
An adjustable-rate mortgage (ARM) starts with a lower mortgage refinance rate than a fixed-rate loan, so some people choose an adjustable-rate loan when they refinance to take advantage of that benefit. Of course, this isn’t for everyone, as interest rates on this type of loan can adjust up or down as market conditions change. (Other borrowers refinance to get out of an adjustable-rate loan and into a fixed-rate one because they want more predictable monthly payments.)
A cash-out refinance is a smart way to leverage your home equity, allowing you to borrow whatever you owe on your first mortgage plus a lump sum that can be used for a variety of financial needs, from home improvements to consolidating high-interest debt. Although cash-out refis often come with higher mortgage refinance rates, they can be a valuable financial resource.
An FHA refinance, backed by the Federal Housing Administration, can be a game-changer with the potential for lower mortgage refinance rates. Refinancing an FHA loan once you have 20% equity in your home also helps you get rid of the FHA mortgage insurance premium that is adding extra costs to your monthly payments. The FHA Simple Refinance and Streamline Refinance are for those with an existing FHA loan. Cash-out and 203(k) refinances — the latter is used for home renovations — are available for everyone.
The VA loan refinance, for loans backed by the U.S. Department of Veterans Affairs, is known for its competitive interest rates. Also known as an Interest Rate Reduction Refinance Loan (IRRRL), this option is for those with an existing VA loan. If interest rates have dropped since you took out your first VA loan, this type of refinance can help you lower your monthly payments and save a significant amount of money on interest over the life of the loan, making it a great option for veterans who qualify.
Once you have narrowed down your choices and have an idea of what loan type you are looking for, follow these tips to secure the best mortgage refinance rate:
• Compare multiple lenders’ offers. Many lenders will give you an idea of what interest rate you might qualify for after you answer a few simple questions online.
• Evaluate the annual percentage rate(APR) and all mortgage refinancing costs and fees for each loan option. (Some lenders offer a no-closing-cost refinance, but the costs are typically rolled into your loan amount or reflected in a higher interest rate.)
• Consider purchasing discount points for a lower interest rate.
• Make sure the new payoff date aligns with your goals.
An online refinance calculator can help you compare your options.
By entering your principal amount, loan rate, and loan term into a refinance calculator, you can see what your monthly payments might look like, and also get a handle on the total interest paid. Here are some useful mortgage calculators:
Punch in your home loan amount and a new interest rate, and we’ll estimate your payoff date.
Enter a few details about your home loan and we’ll provide your monthly mortgage payment.
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.
Refinancing your mortgage can be a smart financial move, but it requires a strategic approach and careful consideration. Whether you want to lower your mortgage refinance rate, tap into your home’s equity, consolidate debt, or get your hands on a lump sum, it’s important to understand the different types of refinance options available and the potential consequences of your decision. By maintaining a good credit score, strategically lowering your debt-to-income ratio, and carefully comparing offers from multiple lenders, you can find the best refinance deal 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.
If you find yourself with a windfall, a mortgage recast is one way to lower the amount you’ll pay for interest without refinancing. You would make a large payment toward your principal and request that your lender recalculate your remaining payments. While this won’t affect your interest rate, it could significantly reduce your monthly payments and the total interest you’ll pay over the life of the loan. There can be a fee of a few hundred dollars for a recast, but it’s a savvy way to use the cash if you have it on hand.
Closing costs usually land somewhere between 2% and 5% of your loan amount. So for a $400,000 refinance, you might be looking at anywhere from $8,000 to $20,000. Keep in mind, these numbers are ballpark figures. The actual amount you’ll pay can fluctuate based on a variety of factors, such as your lender, the type of loan you’re pursuing, and where you live. Understanding these potential costs can help you make informed financial decisions and plan your budget accordingly.
There isn’t a set number of times you can refinance your home, but each refinance is a new loan with closing costs — so if you find yourself looking at a second or even third refinance, you will want to carefully examine the total cost not just of the interest paid on your loan, but also of the closings.
Any borrower could reach out to a lender and request a lower interest rate on their mortgage. But it’s entirely possible the lender will decline your request, especially if you don’t have stellar credit and a spotless payment history. If you are having difficulty making your payment, consider asking your lender for a mortgage loan modification or loan forbearance, in which payments are temporarily paused. In either case, you may need to demonstrate financial hardship.
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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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