RHODE ISLAND MORTGAGE REFINANCE RATES TODAY
Current mortgage refinance rates in
Rhode Island.
Current mortgage refinance rates in
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Compare mortgage refinance rates in Rhode Island.
Key Points
• Mortgage refinance rates in Rhode Island are driven by the bond market and the housing market, among other factors.
• Even a modest dip in mortgage refinance rates can translate to substantial monthly savings for homeowners.
• When considering a 15-year mortgage refinance, it’s important to weigh the benefits of potentially paying off the loan sooner vs. a possible increase in monthly payments.
• For qualified borrowers, FHA and VA loans often come with attractive mortgage refinance rates and easier qualification criteria.
• When considering a mortgage refinance, it’s important to weigh the potential savings against the closing costs and fees to make sure getting a new loan is a smart financial move.
Introduction to Mortgage Refinance Rates
A mortgage refinancegives you the chance to swap out your old mortgage for a new one with fresh terms and a new interest rate. Whether you’re looking to lower your monthly payments, shorten the payoff time on your home loan, or access home equity, the type of refi you choose will influence your mortgage refinance rate. This guide will help you understand how mortgage refinance rates are set and how to secure the lowest available rate. By the end, you’ll be better equipped to make an informed decision about refinancing your home.
💡 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 Mortgage Refinance Interest Rates Come From?
To understand what determines the refinance rate you’ll be offered, it helps to understand where rates originate. Mortgage refinance rates are to a large degree based on the performance of the 10-year U.S. Treasury Note. When the rate on the note rises, mortgage interest tends to follow. Other economic factors — a strong housing market and jobs market — can also lead interest rates to rise, while a recession is usually accompanied by lower interest rates. By keeping an eye on these factors, you can better understand rate fluctuations as you seek the optimal moment to refinance your mortgage.
How Interest Rates Affect Home Affordability
Interest rates play a big role in the affordability of your mortgage refinance. Your monthly payment is based on your loan amount, term, and interest rate. The chart below shows how changing the term or interest rate can affect your monthly costs as well as the total interest paid on your loan. (This table assumes you’re refinancing your mortgage with $300,000 owed; you’ll want to examine how any new rate you’re offered compares to the costs associated with the rate you already have.)
| Interest Rate | Loan Term | Monthly Payment | Total Interest |
|---|---|---|---|
| 6.00% | 30-year | $1,799 | $347,515 |
| 6.00% | 15-year | $2,532 | $155,683 |
| 7.00% | 30-year | $1,996 | $418,527 |
| 7.00% | 15-year | $2,697 | $185,367 |
Why Refinance in Rhode Island?
Refinancing your mortgage can be a savvy financial maneuver, but it’s not a decision to take lightly. Whether a refinance makes sense for you will depend in large part on why you are refinancing.
Common Reasons to Refinance a Mortgage
• You qualify for a lower interest rate, thanks to improved credit or better market conditions.
• You’re considering revising your repayment term to either lighten your monthly load or settle the loan quicker.
• You want to tap into your home equity for a big expense like college or home improvements, or to free up cash to pay off high-interest debt.
• Your adjustable-rate mortgage is about to reset, and you want to switch to a fixed rate.
• You have an FHA loan (backed by the Federal Housing Administration). You’ve reached 20% equity in your home and are eager to bid farewell to the FHA mortgage insurance premium.
If you’re wondering how soon you can refinance your mortgage, it’s generally best to have at least 20% equity in your home when refinancing. This is especially true if you are pursuing a cash-out refi (more on that below).
How to Get the Best Available Mortgage Refi Rate
When you’re learning how to refinance a mortgage, these are the first steps to take. Following this path before you even apply for a refi can help ensure you get the best available rate.
• Pay your bills on time to take good care of your credit score.
• Check your equity level. Search online for your property’s estimated current value. Subtract whatever you owe on your mortgage from that number. Divide the result by your home’s estimated value to arrive at a percentage of equity.
• Know your debt-to-income (DTI) ratio; if it’s above 36%, try to reduce it. (To determine your DTI, add up your monthly debts, divide by your gross monthly income, and multiply by 100.)
• Determine whether you have some cash available to purchase discount points to lower your new mortgage rate. Each point typically costs about 1% of your principal.
• Figure out whether your monthly budget could accommodate a larger mortgage payment than you currently have. In that case, you might opt for a shorter mortgage term, which will allow you to pay less interest over the life of the loan.
Understand Trends in Rhode Island Mortgage Interest Rates
As you consider current mortgage rates in Rhode Island, it helps to have some perspective on the highs and lows of the mortgage marketplace in the state. The chart below shows average state rates for almost two decades.
Historical U.S. Mortgage Interest Rates
Looking at average rates over a much longer span of time — in this case over a half-century — can also help give you some insight into whether rates are atypical. Many borrowers today may recall that in 2021, the average rate reached the 3.00% zone. But as you can see from the graphic below, that’s a highly unusual occurrence.
Historical Interest Rates in Rhode Island
Rhode Island’s mortgage refinance rates often mirror the national landscape. The chart below may be helpful if you are waiting for an interest rate drop. As you can see, big changes of more than a percentage point are somewhat unusual from year to year; it’s over a longer period of time that you might see such a significant shift.
| Year | Rhode Island Rate | National Rate |
|---|---|---|
| 2000 | 8.08 | 8.14 |
| 2001 | 6.91 | 7.03 |
| 2002 | 6.49 | 6.62 |
| 2003 | 5.81 | 5.83 |
| 2004 | 5.56 | 5.95 |
| 2005 | 5.70 | 6.00 |
| 2006 | 6.31 | 6.60 |
| 2007 | 6.33 | 6.44 |
| 2008 | 6.06 | 6.09 |
| 2009 | 4.94 | 5.06 |
| 2010 | 4.62 | 4.84 |
| 2011 | 4.41 | 4.66 |
| 2012 | 3.76 | 3.74 |
| 2013 | 3.79 | 3.92 |
| 2014 | 4.03 | 4.24 |
| 2015 | 3.78 | 3.91 |
| 2016 | 3.60 | 3.72 |
| 2017 | 3.92 | 4.03 |
| 2018 | 4.32 | 4.57 |
Choose the Right Mortgage Refi Type
Mortgage refinance rates in Rhode Island are as varied as the types of refinance you can choose. Each has its own unique features and potential benefits. Here are the most common mortgage refinance types:
Conventional Refi
A conventional refinance, also known as a rate-and-term refinance, allows you to adjust your interest rate or loan term (or both). These types of refinances typically have higher mortgage refinance rates than government-backed loans, but they are very flexible and popular. They’re a good option for borrowers with strong credit and solid equity. Two common options are the 15-year refi and the adjustable-rate refi.
15-Year Mortgage Refi
Refinancing into a 15-year mortgage can slash your total interest payments, even if it means paying a bit more each month. Some borrowers choose a shorter term loan because they know retirement or college expenses are just around the corner.
Adjustable-Rate Mortgage Refi
Adjustable-rate mortgages (ARMs) typically offer lower initial mortgage refinance rates compared to fixed-rate loans. This can be attractive to homeowners who plan to move or think they might refinance again before the rate adjusts. Switching to an ARM could lower your monthly payment and save you money in the short term. However, it’s important to understand how your rate and payments can change if the rate eventually adjusts, and to think about what that might mean for your overall financial plan.
Cash-Out Refi
A cash-out refinance is a cost-efficient way to borrow a lump sum, whether you need the funds for a kitchen remodel or are aiming to consolidate high-interest debt. The rates for this type of refinance can be a tad higher than for a typical home loan, but they are likely still lower than the interest rate on a personal loan or credit card. How it works: You refinance into a loan that is larger than the one you currently have. You pay off your first loan and use the balance as you wish.
FHA Refi
FHA loans, insured by the Federal Housing Administration, often come with lower mortgage refinance rates and more flexible credit score requirements. While FHA Simple Refinances and FHA Streamline Refinances are only available to those with existing FHA loans, other options like the FHA cash-out refinance and FHA 203(k) refinance are open to a wider range of homeowners. These options can provide access to home equity or otherwise free up cash for home improvements.
VA Refi
VA loans, backed by the United States Department of Veterans Affairs, consistently 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. It’s a great option for eligible homeowners who want to improve their financial situation.
Compare Mortgage Refi Interest Rates
Once you’ve decided on the type of refinance that suits your needs, use these strategies to help ensure you get the best available rate.
• Shop around and get quotes from multiple lenders.
• When you compare loans, don’t just examine the interest rate you’re offered. Look at each loan’s annual percentage rate (APR), which includes the interest rate and fees. It’s important to get a picture of total mortgage refinancing costs before you decide on a loan.
• Calculate your break-even point: After how many months will the monthly savings on your loan outweigh the loan’s closing costs and fees?
• Chat with a lender to get the full picture of your options and their financial implications.
At this point, an online refinance calculator will be a handy tool.
Use an Online Refinance Calculator
An online refinance calculator can help you understand what your new monthly payments will be when you’re comparing different refinance options, and show you the total interest you will pay over the life of the loan. These are a few of our favorite calculators:
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 is a smart move if you can secure a lower mortgage rate, save on interest over the long term, or tap into your home’s equity. Whether you’re considering a cash-out refi, an FHA refi, a VA refi, or a 15-year mortgage, it’s important to think about your financial goals and the long-term impact of your decision. By taking good care of your credit score, watching your debt-to-income ratio, and comparing offers from multiple lenders, you can get the best deal on a new loan.
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 it a good idea to refinance your home?
Refinancing your home can be a good financial move if you can lock in a lower interest rate, consolidate debt, or meet other important financial goals. The key is to use a refinance calculator to figure out whether a new mortgage would be a cost savings over your current loan. At what point will the money you spend on refinancing (including fees and closing costs) be outweighed by any cash you save in the refinancing process? If you think you might move before you’ve recouped the cost, a refi may not make sense.
Can I lower my interest rate without refinancing?
If you have some cash on hand, a mortgage recast might be a good option. With a recast, you make a large payment toward your loan principal and your lender “recasts” your remaining payments. This won’t change your interest rate, but it could lower your payments and save you money. It’s not for everyone, but if you have the means to make a lump sum payment and want to lower your monthly housing expenses, a recast could be a good option.
Can I get cash out of my house without refinancing?
You can access the equity in your home without doing a cash-out refinance by obtaining a home equity line of credit (HELOC) or a home equity loan. These products — which are technically a second mortgage — allow you to tap into the equity in your home without changing your current mortgage.
Will refinancing your mortgage hurt your credit?
In the short term, refinancing can cause a slight drop in your credit score. This is because of the hard inquiry a lender does during the approval process. But the impact is usually minimal and can be offset by the benefits of getting a lower mortgage rate. In the end, the temporary hit to your credit score is likely to be a small price to pay for the long-term savings you could realize from a new loan.
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.
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. 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 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