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Compare mortgage refinance rates in Texas.
Key Points
• Mortgage refinance rates are influenced by economic factors such as inflation and bond market dynamics.
• A mere one-percentage-point drop in the mortgage refinance rate can translate to hefty savings on interest.
• Opting for a 15-year mortgage could be a smart move, helping you save on interest in the long run, even if the monthly payments are a bit steeper.
• Some borrowers refinance out of or into adjustable-rate mortgages (ARMs). These typically have lower initial refinance rates and could be a good option for those who plan to move or refinance in the near future.
• Compare rates and fees from multiple lenders to find the best mortgage refinance option for your situation.
Introduction to Mortgage Refinance Rates
A mortgage refinance is the process of replacing your existing home loan with a new one. The terms of the new mortgage can be different, but the most common goal is to secure a lower interest rate and reduced monthly mortgage payments. The type of refinance you choose will determine your interest rate. This guide will help you understand how current mortgage rates are set and how you can get the best available rate. By the end, you’ll have a better understanding of what to expect and how 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?
The first step to mastering the mortgage refinance is understanding what economic forces drive interest rates. Like the weather, rates are influenced by a lot of different factors, some of which are out of your control. Insiders look to the bond market and specifically the performance of the 10-year U.S. Treasury note for a hint at where interest rates are headed. When the rate on the 10-year T-note rises, mortgage interest tends to rise also.
Another factor is the housing market. When the market is hot, lenders have little incentive to lower rates because they don’t need to do so to attract customers. Then there is the overall economy: A strong jobs market and economic growth can lead interest rates to rise, while a recession is usually accompanied by lower interest rates. Your personal qualifications also play a large role in the rate you’ll be offered. You’ll get into that below.
How Interest Rates Affect Home Affordability
It’s worth keeping an eye on the rise and fall of interest rates because the rate you get will play a key role in the affordability of your mortgage refinance. As you can see from the chart below, on a $200,000 loan, each half-percentage-point increase in interest results in a corresponding bump in monthly payment. Play that out over the life of a 30-year loan, and you can see a significant difference in interest paid. The more you borrow, the greater the savings at a lower rate.
| 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 | $303,433 |
| 8.00% | $1,467 | $328,309 |
Why Refinance in Texas?
Refinancing your mortgage is a smart financial play, but it’s not one to be taken lightly. You’re probably wondering: How soon can you refinance a mortgage? If the current interest rates are more favorable than what you have, it’s a golden opportunity. With at least 20% equity in your home, you’re in a good position, especially if you’re eyeing a cash-out refi. Here are some reasons refinancing might be attractive:
Common Reasons to Refinance a Mortgage
• You might be eligible for a lower mortgage refinance rate because your credit score has improved since you bought your home or market conditions have led to a rate drop.
• You want to adjust your repayment term to better fit your financial goals. Maybe you need a lower payment right now due to other bills. If so, a longer term might provide that.
• You’re looking to tap into your home equity to cover expenses such as college tuition.
• You have an adjustable-rate loan, and you want to lock in a fixed rate for peace of mind.
• You have an FHA loan backed by the Federal Housing Administration, and now that you have 20% equity, you want to ditch the FHA mortgage insurance premium.
How to Get the Best Available Mortgage Refi Interest Rate
There are a few things you should do from Day One to secure a competitive mortgage refinance rate, should you decide to refi:
• Care for your credit score by staying on top of payments of all bills.
• Examine your debt-to-income (DTI) ratio. Lenders like a ratio below 36% for a refinance. To learn your number, add up your monthly debts and divide by your gross monthly income; multiply by 100.
• Evaluate whether you have cash on hand that you can use to purchase discount points to lower your rate.
• Determine how large a monthly payment your budget can handle. This will help you decide if you can choose a shorter loan term, which will save you interest.
Understand Trends in Texas Mortgage Interest Rates
Once you’ve decided to refinance, an important step is determining the timing. And that might depend on current mortgage refinance rates in Texas. If you’re looking to lock in a lower rate, it’s important to keep an eye on the market. It also helps to have a sense of the history to help ensure that your expectations are realistic. In general, Texas mortgage refinance rates have seen their share of ups and downs, for the most part trailing the national average just slightly.
Historical U.S. Mortgage Interest Rates
Looking at a much longer span of time, a half-century, can give you perspective on the rates that are now available. As you can see from the graphic below, it’s pretty rare for rates to dip as low as they did in 2020 and 2021. By keeping an eye on these trends, you can make an informed decision about whether to pursue your mortgage refinance, and when.
Choose the Right Mortgage Refi Type
An important step in deciding how to refinance your mortgage is selecting the type of loan you will refinance into. These are some of the most common types.
Conventional Refi
A conventional refinance, also known as a rate-and-term refinance, allows you to change your interest rate, loan term, or both. These loans typically offer higher rates than government-backed loans from the FHA or VA, for example. But a conventional refinance could be a good option if you’re looking to lower your interest rate, change your loan term, or both.
15-Year Mortgage Refi
Some people refinance into a loan with a shorter term than their original mortgage. It’s common to go from a 30-year term to a 15-year one. This means higher monthly payments in the short term, but it’s a savvy move that can slash the total interest you pay over the loan’s lifetime. And if you combine a shorter term with a lower interest rate, you might not even feel such a burden from the larger monthly payments. Some people like the fact that shortening the term helps them get rid of mortgage debt before retirement. (Of course, other people might refi from a 15-year loan into a 30-year one. Choosing a term is based on your personal financial circumstances.)
Adjustable-Rate Mortgage Refi
Adjustable-rate mortgages (ARMs) offer a low initial interest rate and so might be attractive to some borrowers — especially those who know they plan to sell the home before the rate on their new loan begins to adjust. Some borrowers prefer to adjust out of an ARM and into a fixed-rate loan because they want their monthly payments to be steady and predictable.
Cash-Out Refi
This type of refinance is a powerful financial tool that allows you to leverage your home equity. By refinancing your mortgage for more than you currently owe, you can access a lump sum of cash that can be used for home improvements or debt consolidation, for example. Although a cash-out refinance typically carries a higher mortgage refinance rate than a traditional refinance, it’s one of the more cost-effective ways to borrow a large sum of money.
FHA Refi
FHA loans, backed by the Federal Housing Administration, often offer attractive mortgage refinance rates, making FHA refinances a popular choice for homeowners. For those with existing FHA loans, the FHA Simple Refinance and FHA Streamline Refinance are designed to simplify the process and potentially reduce your rate. If you don’t have an FHA loan, you may still benefit from an FHA cash-out refinance or FHA 203(k) refinance. The latter is designed for home renovations.
VA Refi
VA loans, guaranteed by the United States Department of Veterans Affairs, are known for offering some of the best mortgage refinance rates. To refinance with a VA interest rate reduction refinance loan (IRRRL), you’ll need to have a VA loan in the first place. There is also a VA cash-out refinance, and anyone who qualifies for a VA loan can use this to take advantage of their home equity in a refinance.
Compare Mortgage Refi Interest Rates
Once you know what type of refinance you’re going to pursue, it’s time to secure a competitive mortgage refinance rate. Here’s what to do:
• Compare rates and fees from multiple mortgage lenders.
• Look at the loan’s annual percentage rate (APR), which includes interest and fees. These and other closing costs are part of the total picture of your mortgage refinancing costs.
• Weigh the cost of discount points against long-term savings, and decide whether or not you will purchase points.
A refinance calculator can help you estimate your savings and make an informed decision.
Use an Online Refinance Calculator
Online refinance calculators are a great way to get an estimate of what your new monthly payment may be and to compare different refinance options. You probably used a similar calculator during your home purchase process. An online Texas refinance calculator will also show you how much you could save by refinancing, which can help you decide if refinancing is the right choice 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 smart financial move, but it requires some careful consideration and planning. Whether you’re looking to get a lower mortgage refinance rate, tap into your home’s equity, or consolidate debt, it’s important to understand the different types of refinances and the requirements for each. By taking steps to strengthen your credit score and lower your debt-to-income ratio and by comparing offers from multiple lenders, you can help ensure that you get the best rate and terms for your situation.
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 would a 1% drop in interest rate affect your monthly payment?
You may be surprised at how much a one-percentage-point reduction in your mortgage refinance rate can impact your monthly budget. For example, if you have a $300,000, 30-year mortgage, and you’re currently paying 7.00% interest and can refinance to 6.00%, you could see your monthly payment amount drop by $197. Over time, that seemingly small change can add up to big savings, and, of course, the larger your loan amount, the larger your savings as well.
Can I lower my interest rate without refinancing?
It might be difficult to lower your mortgage interest rate without refinancing, but you can reduce your monthly payments by undertaking a mortgage recast, which involves making a lump-sum payment toward your principal balance. Make sure you tell your lender the money is to be credited to the principal you owe, and you can then request that your lender “recast” your monthly payment amount to reflect the reduced principal — of course, this only works if you have a lump sum on hand. If you’re facing financial hardship, you could also ask your lender about a loan modification, and it will have a formal request process for this type of adjustment.
Is there a fee to recast your mortgage?
The fee to recast your mortgage ranges from $150-$500, which is far less than the cost of a refinance. To determine if recasting your mortgage is worth it, look at how the interest saved over the remaining life of your loan compares to the earnings or savings you might enjoy if you used that lump sum in another way — for example, to pay off some other form of debt or to make investments.
How many times can you refinance your home loan?
There’s no official rule on how many times you can refinance your home, but each time you do, there are closing costs to consider and a potential impact on your credit score. Take a step back and weigh the benefits of a lower mortgage refinance rate against these costs and impacts, and before you make a decision, consider the current interest rate climate, your financial situation, and your long-term goals. Refinancing can be a savvy financial move, but it’s important to make sure it’s the right move for you.
SoFi Mortgages
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SoFi Loan Products
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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.
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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 .
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‡Up to $9,500 cash back: HomeStory Rewards is offered by HomeStory Real Estate Services, a licensed real estate broker. HomeStory Real Estate Services is not affiliated with SoFi Bank, N.A. (SoFi). SoFi is not responsible for the program provided by HomeStory Real Estate Services. Obtaining a mortgage from SoFi is optional and not required to participate in the program offered by HomeStory Real Estate Services. The borrower may arrange for financing with any lender. Rebate amount based on home sale price, see table for details.
Qualifying for the reward requires using a real estate agent that participates in HomeStory’s broker to broker agreement to complete the real estate buy and/or sell transaction. You retain the right to negotiate buyer and or seller representation agreements. Upon successful close of the transaction, the Real Estate Agent pays a fee to HomeStory Real Estate Services. All Agents have been independently vetted by HomeStory to meet performance expectations required to participate in the program. If you are currently working with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®. A reward is not available where prohibited by state law, including Alaska, Iowa, Louisiana and Missouri. A reduced agent commission may be available for sellers in lieu of the reward in Mississippi, New Jersey, Oklahoma, and Oregon and should be discussed with the agent upon enrollment. No reward will be available for buyers in Mississippi, Oklahoma, and Oregon. A commission credit may be available for buyers in lieu of the reward in New Jersey and must be discussed with the agent upon enrollment and included in a Buyer Agency Agreement with Rebate Provision. Rewards in Kansas and Tennessee are required to be delivered by gift card.
HomeStory will issue the reward using the payment option you select and will be sent to the client enrolled in the program within 45 days of HomeStory Real Estate Services receipt of settlement statements and any other documentation reasonably required to calculate the applicable reward amount. Real estate agent fees and commissions still apply. Short sale transactions do not qualify for the reward. Depending on state regulations highlighted above, reward amount is based on sale price of the home purchased and/or sold and cannot exceed $9,500 per buy or sell transaction. Employer-sponsored relocations may preclude participation in the reward program offering. SoFi is not responsible for the reward.
SoFi Bank, N.A. (NMLS #696891) does not perform any activity that is or could be construed as unlicensed real estate activity, and SoFi is not licensed as a real estate broker. Agents of SoFi are not authorized to perform real estate activity.
If your property is currently listed with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®.
Reward is valid for 18 months from date of enrollment. After 18 months, you must re-enroll to be eligible for a reward.
SoFi loans subject to credit approval. Offer subject to change or cancellation without notice.
The trademarks, logos and names of other companies, products and services are the property of their respective owners.
Qualifying for the reward requires using a real estate agent that participates in HomeStory’s broker to broker agreement to complete the real estate buy and/or sell transaction. You retain the right to negotiate buyer and or seller representation agreements. Upon successful close of the transaction, the Real Estate Agent pays a fee to HomeStory Real Estate Services. All Agents have been independently vetted by HomeStory to meet performance expectations required to participate in the program. If you are currently working with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®. A reward is not available where prohibited by state law, including Alaska, Iowa, Louisiana and Missouri. A reduced agent commission may be available for sellers in lieu of the reward in Mississippi, New Jersey, Oklahoma, and Oregon and should be discussed with the agent upon enrollment. No reward will be available for buyers in Mississippi, Oklahoma, and Oregon. A commission credit may be available for buyers in lieu of the reward in New Jersey and must be discussed with the agent upon enrollment and included in a Buyer Agency Agreement with Rebate Provision. Rewards in Kansas and Tennessee are required to be delivered by gift card.
HomeStory will issue the reward using the payment option you select and will be sent to the client enrolled in the program within 45 days of HomeStory Real Estate Services receipt of settlement statements and any other documentation reasonably required to calculate the applicable reward amount. Real estate agent fees and commissions still apply. Short sale transactions do not qualify for the reward. Depending on state regulations highlighted above, reward amount is based on sale price of the home purchased and/or sold and cannot exceed $9,500 per buy or sell transaction. Employer-sponsored relocations may preclude participation in the reward program offering. SoFi is not responsible for the reward.
SoFi Bank, N.A. (NMLS #696891) does not perform any activity that is or could be construed as unlicensed real estate activity, and SoFi is not licensed as a real estate broker. Agents of SoFi are not authorized to perform real estate activity.
If your property is currently listed with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®.
Reward is valid for 18 months from date of enrollment. After 18 months, you must re-enroll to be eligible for a reward.
SoFi loans subject to credit approval. Offer subject to change or cancellation without notice.
The trademarks, logos and names of other companies, products and services are the property of their respective owners.
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More refinance resources.
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7 Signs It’s Time for a Mortgage Refinance