Current Mortgage Refinance Rates in Arizona Today
Apply online or call for a complimentary mortgage consultation.
Compare mortgage refinance rates in Arizona.
Key Points
• Mortgage refinancing can be a wise financial step, whether borrowers are looking to pay less interest, consolidate debt, or fund a home improvement project.
• A half-percentage-point interest rate reduction can save nearly $50,000 in interest on a $300,000 loan.
• To get the best available mortgage refinance rate in Arizona, cultivate a good credit score, maintain a low debt-to-income ratio, and compare offers from different lenders.
• Government loans such as VA and FHA refinances offer lower rates to those who meet specific eligibility criteria.
• Expect mortgage refinancing to cost 2% to 5% of the loan amount, and factor those costs into the overall cost of a refinance.
Introduction to Mortgage Refi Rates
Refinancing your home loan can be a smart money move. A refinance allows you to replace your existing mortgage with a new one under different terms. Whether you want to lower your monthly payment, shorten the years it takes to pay off your loan, or access some of your home equity, it pays to understand how refinance rates in Arizona are determined and how to get the best rate. This guide will help you through the process. By the end, you’ll have a better understanding of how to make the most of your mortgage refinance.
💡 Quick Tip: Lowering your monthly payments with a mortgage refinance from SoFi can help you find money to pay down other debt, build your rainy-day fund, or put more into your 401(k).
Where Do Mortgage Refinance Interest Rates Come From?
Current mortgage rates are the product of a complex interplay between the economic landscape and your personal financial standing (your equity level and credit score, for example). Historically, the strongest indicator of where mortgage interest rates are headed lies 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 the housing market. When more homes are available than there are buyers, lenders may lower rates to keep customers engaged. 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.
How Interest Rates Affect Home Affordability
Interest rates play a big role in the affordability of your mortgage refinance. Your monthly payment is a product of your loan amount, the term over which you’re repaying it, and the interest rate. For instance, a $300,000 loan with a 6.00% interest rate and a 30-year term would mean a monthly payment of $1,799. But if your interest rate was 7.00%, the monthly payment would jump to $1,996. Over the life of the loan, that lower interest rate could save you more than $71,000. So small changes in mortgage refinance rates in Arizona can lead to substantial savings over time. Here’s a closer look at how different rates and terms affect payments on a $300,000 loan.
| 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 Arizona?
Homeowners refinance their mortgages for different reasons. If current interest rates are lower than your existing mortgage, refinancing could save you money. But there are other reasons as well.
Common Reasons to Refinance a Mortgage
• Lower interest rates can mean smaller monthly payments and more savings.
• Adjusting the repayment terms can either ease your monthly budget (a longer term) or help you become debt-free sooner (a shorter term).
• Cashing out equity can help you cover big expenses like education or renovations.
• Switching to a fixed-rate mortgage can offer peace of mind and guard against potential rate hikes.
• If you have an FHA loan and 20% equity, refinancing can remove the FHA mortgage insurance premium. (If you’re wondering how soon you can refinance a mortgage, one good rule of thumb is that you want 20% equity, whatever type of mortgage you have.)
• Consolidating debt can reduce interest payments.
How to Get the Best Available Mortgage Refi Interest Rate
To snag a top-notch mortgage refinance rate, work on elevating your credit score by paying your bills promptly and steering clear of new debt. A debt-to-income ratio of 36% or less is the sweet spot. (To compute your DTI percentage, add up your monthly debts, divide by your gross monthly income, and then multiply by 100.)
Other tips for how to refinance a mortgage are similar to strategies you used to find your first home loan: Shop around and compare interest rates and fees from various lenders. Think about purchasing mortgage points to bring down your interest rate. And if you can swing it, opt for the shortest term to enjoy lower rates. Below are more ways to get smart to the refinancing process.
Understand Trends in Arizona Mortgage Interest Rates
Historical U.S. Mortgage Interest Rates
Seeing trends in U.S. mortgage rates over a long span of time can help put current rates into perspective. Knowing this history can help you make more informed decisions about refinancing. As you can see from the chart below, it’s pretty unusual for rates to dip below 5%. But it’s also not common to see rates over 10%.
Historical Interest Rates in Arizona
It’s important to keep an eye on current mortgage refinance rates in Arizona to make sure you’re getting the best deal you can. But it also helps to have a sense of the history of rates in Arizona. As the chart below shows, Arizona mortgage refinance rates have tended to trail the national average slightly. It’s important to keep in mind that the rates you see advertised are just a starting point. You might end up with a higher or lower rate depending on your credit score and other factors.
| Year | Arizona Rate | National Rate |
|---|---|---|
| 2000 | 7.99 | 8.14 |
| 2001 | 7.00 | 7.03 |
| 2002 | 6.51 | 6.62 |
| 2003 | 5.72 | 5.83 |
| 2004 | 5.73 | 5.95 |
| 2005 | 5.86 | 6.00 |
| 2006 | 6.57 | 6.60 |
| 2007 | 6.46 | 6.44 |
| 2008 | 6.12 | 6.09 |
| 2009 | 5.15 | 5.06 |
| 2010 | 4.81 | 4.84 |
| 2011 | 4.63 | 4.66 |
| 2012 | 3.73 | 3.74 |
| 2013 | 3.85 | 3.92 |
| 2014 | 4.18 | 4.24 |
| 2015 | 3.91 | 3.91 |
| 2016 | 3.76 | 3.72 |
| 2017 | 4.03 | 4.03 |
| 2018 | 4.66 | 4.57 |
Choose the Right Mortgage Refi Type
Which type of mortgage you choose during the refinancing process will also have an impact on your costs. Check out this list of the most common types:
Conventional Refi
This type of refi typically comes with higher rates than government-backed loans, but conventional refis are ideal for homeowners looking to secure a lower interest rate or adjust their repayment term (or both). Arizona refinance rates for conventional loans can vary, so it’s important to compare multiple lenders to find the best terms. Two popular types of conventional refi are the 15-year mortgage and the adjustable-rate refi.
15-Year Mortgage Refi
Refinancing to a 15-year mortgage can slash the total interest you pay over the life of the loan, although it does mean steeper monthly payments. But if your income has increased since you initially bought your home, making higher monthly payments could help you shake mortgage debt sooner.
Adjustable-Rate Mortgage Refi
An adjustable-rate mortgage kicks off with a lower interest rate than a fixed-rate mortgage, although the rate can later adjust based on market conditions. If you’re planning to move before the fixed-rate period ends, an ARM might be a smart refinancing move. Even more so if you suspect that mortgage interest rates might drop in the future (because adjustable rates can adjust up or down). Of course some borrowers opt to refinance out of an ARM and into a fixed-rate loan. Choosing a refinance route is a very personal decision.
Cash-Out Refi
Cash-out refinancing is a savvy way to leverage your home’s equity. Picture this: Your home is valued at $500,000, and you still owe $300,000 on your mortgage. That means you’ve got $200,000 in equity just waiting to be put to work. A lender might agree to let you borrow up to 80% of that equity, which could leave you with $100,000 after you’ve paid off your existing mortgage. Money from a cash-out refinance typically comes to you in a lump sum and can be used for any purpose. Just remember, it is a loan and so your monthly mortgage payments may increase with a cash-out refi.
FHA Refi
FHA loans are backed by the Federal Housing Administration. They often offer lower interest rates — sometimes a full percentage point less — than conventional loans. If you’re already in an FHA loan, you’ve got options like the FHA Simple Refinance or Streamline Refinance. But even if you’re not, you can explore an FHA cash-out refinance or an FHA 203(k) refinance, perfect for those home-improvement dreams.
VA Refi
VA loans, backed by the United States Department of Veterans Affairs, are known for offering some of the most competitive interest rates in the market. To qualify 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 help you secure a lower interest rate and potentially reduce your monthly payments. When you’re looking at the current mortgage refinance rates in Arizona, a VA refinance could be a very cost-effective option for eligible homeowners.
Compare Mortgage Refi Interest Rates
Once you’ve narrowed down your list of possible mortgage refi types, you’ll want to shop around and compare mortgage refinance rates from different lenders. Make sure you look at the annual percentage rate (APR) on different loans, not just the interest rate. (You can often go through a brief online prequalification process to learn what rate a lender might offer you.) Consider the cost vs. benefit of purchasing discount points (also known as mortgage points), which can lower the rate you’re offered. Look closely at how lenders’ fees contribute to mortgage refinancing costs as well. You will probably find a refi calculator to be a handy tool as you examine your options.
Use Online Calculators
An online refinance calculator is an invaluable resource when you’re contemplating your refinancing options. Calculators can help you understand potential financial benefits and mortgage refinancing costs. Here are a few of our favorite calculators to help you make informed financial decisions.
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.
-
Down payment calculator
Enter a few details about your home loan and we’ll provide your monthly mortgage payment.
-
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
Mortgage refinancing can be a powerful financial tool, reducing interest paid, providing breathing room in your budget, or freeing up equity for big expenses. However, it’s important to weigh the costs and benefits, including closing costs and the impact on your monthly payments. By taking good care of your credit score, lowering your debt-to-income ratio, and comparing rates from multiple lenders, you can secure the best possible refinancing rate and terms in Arizona.
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 going to drop?
There’s no crystal ball that can predict future mortgage rates, but you can look at key indicators to try to get a sense of where rates might be headed. If the 10-year Treasury Note rate is rising, the housing market is hot, or the economy is generally strong, it’s unlikely that you will see rates falling in the near term. Keep an eye on the current refinance rates in Arizona so you’ll know when the time to refinance is right for you.
When is it smart to refinance your home?
Refinancing your home can be a smart financial move if you lock in a lower interest rate, consolidate debt, or meet other important financial goals. The key is to do the math to figure out at what point the money you spend on refinancing is outweighed by any cash you save in the refinancing process. How long do you plan to stay in the home? If you think you might move before you’ve recouped the cost, a refi may not make sense.
Can I ask my lender to lower my interest rate?
If you want a lower interest rate, you can start a dialogue with your lender and ask for a reduction, using the current mortgage refinance rates in Arizona as a guide. If you’ve been financially responsible, maintaining a high credit score and making your payments on time, you’re in a good position to negotiate. But don’t be surprised if your lender declines your request.
Can I get cash out of my house without refinancing?
You can tap into your home’s equity to get cash without a refinance by requesting a home equity line of credit (HELOC) or taking out a home equity loan. A HELOC or home equity loan can be a great way to pay for home improvements, consolidate debt, or cover other expenses that come up. Technically, a HELOC or home equity loan is a second mortgage (assuming you still have your first mortgage), so it’s important to find the most competitive interest rate during the application process.
Are there any fees to recast your mortgage?
The fee to recast your mortgage typically ranges from $150 to $500, which is much less than the cost of a refinance. A recast involves using some of your savings to pay down a portion of the principal owed on your mortgage. Your lender then “recasts” your future payments. 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.
SoFi Mortgages
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SoFi Loan Products
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SOHL-Q125-156
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
Apply online or call for a complimentary mortgage consultation.
Current Mortgage Refinance Rates in Alaska Today
Apply online or call for a complimentary mortgage consultation.
Compare mortgage refinance rates in Alaska.
Key Points
• Mortgage refinancing can be a smart financial move, whether borrowers are looking to save money, consolidate debt, or fund home improvements.
• A one-percentage-point interest rate reduction can save nearly $100,000 in interest on a $200,000 loan.
• To obtain a good mortgage refinance rate in Alaska, it helps to have a good credit score, a low debt-to-income ratio, and to compare offers from different lenders.
• Government loans such as FHA and VA refinances offer lower rates to those who meet specific eligibility criteria.
• Mortgage refinancing typically costs 2% to 5% of the loan amount, and those costs should be factored into the overall cost of a refinance.
Introduction to Mortgage Refinance Rates
What exactly is a mortgage refinance? It’s like a fresh start for your mortgage, with the potential for better terms or a lower interest rate. The kind of refinance you opt for will depend on what you’re aiming for, be it a lower rate or tapping into your home’s equity. This is your go-to guide for understanding how mortgage refi rates are set and how you can snag the best one out there. Whether you’re in Alaska or somewhere else, being in the know about the factors at play will help you make a savvy choice.
💡 Quick Tip: How soon can you refinance your mortgage? It varies by loan type, but typical waiting periods are 6 to 12 months.
Where Do Mortgage Refi Interest Rates Come From?
Mortgage refinance interest rates are a product of both economic indicators and your personal financial situation. On the economic front, the bond market (and specifically the performance of the 10-year U.S. Treasury Note) is important to lenders setting current mortgage rates. When rates on the T note rise, mortgage interest tends to head north as well.
Housing inventory is also key. When the market cools and more homes are 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 interest rates to rise, while a recession is usually accompanied by lower interest rates. As for your personal financial metrics: A strong credit score and low debt-to-income ratio will help you qualify for the best possible rate.
How Interest Rates Affect Home Affordability
Interest rates play a major role in the affordability of your refinance. Your monthly payment amount is driven by your loan amount, the term for repayment, and the interest rate. Let’s break it down: A $200,000 loan with a 6.00% interest rate over 30 years equals a $1,199 monthly payment. Bump that interest rate to 8.00%, and your monthly payment jumps to $1,468. Over the life of the loan, you would save almost $100,000 with the lower interest rate.
Here’s a look at how other interest rates would affect your payments and total interest for that same $200,000, 30-year 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 |
Why Refinance in Alaska?
Homeowners refinance their mortgages for a multitude of reasons, each influencing the type of refinance and the interest rate. If current interest rates are lower than your existing mortgage, refinancing can save you money. It’s recommended to have at least 20% equity in your home, especially if you plan to cash out equity. Refinancing can also help you change your repayment term, switch from an adjustable-rate to a fixed-rate loan, or eliminate private mortgage insurance. Alaska refinance rates can play a significant role in these decisions.
Common Reasons to Refinance a Mortgage
Here are some common reasons homeowners refinance their mortgage:
• You qualify for a lower interest rate thanks to your improved credit score or better market conditions.
• You need a lower monthly payment amount to better fit your budget.
• You have more money available to put toward your mortgage and want to pay off the loan more quickly.
• You’re considering cashing out some of your home equity for expenses like education or home improvements.
• Your adjustable-rate mortgage is about to reset, and you want a fixed rate for peace of mind.
• You have an FHA loan and 20% equity, and you’re itching to bid the FHA mortgage insurance premium goodbye.
• You’re thinking of consolidating high-interest debt into a lower-rate mortgage.
How to Get the Best Available Mortgage Refi Rate
There are some basic things you can do to secure a competitive mortgage refinance rate when you are starting to think about how to refinance a mortgage:
• Boost your credit score by keeping up with payments.
• Lower your debt-to-income ratio by paying off debt.
• Consider whether you have any extra cash on hand that you could use to purchase mortgage discount points — essentially paying to get a better rate.
• Choose a shorter mortgage term. Shorter term loans typically are offered lower rates because lenders perceive them as less risky.
To really up your game and compete for the best possible rate, you’ll want to take the following steps as well.
Understand Trends in Alaska Mortgage Interest Rates
Mortgage rates in Alaska have been on a bit of a roller coaster in recent years, and while many experts thought rates would start to fall in late 2024, they didn’t drop significantly in the first quarter of 2025. If you’re a homeowner in Alaska, it’s important to keep an eye on mortgage refinance rates in your area so that you can consider refinancing when the time is right. Here’s a look at past rates in the state (the Federal Housing Financing Agency stopped tracking state-by-state rates after 2018).
Historical U.S. Mortgage Interest Rates
For the bigger picture, have a look at mortgage interest rates in the United States over the last half-century. As you can see from the chart below, it’s pretty unusual to encounter a rate above 10% — or below 5%.
Historical Interest Rates in Alaska
Seeing the history of rates in your state can help put current rates into perspective.
| Year | Alaska Rate | National Rate |
|---|---|---|
| 2000 | 8.20 | 8.14 |
| 2001 | 6.88 | 7.03 |
| 2002 | 6.31 | 6.62 |
| 2003 | 5.55 | 5.83 |
| 2004 | 5.59 | 5.95 |
| 2005 | 5.86 | 6.00 |
| 2006 | 6.39 | 6.60 |
| 2007 | 6.29 | 6.44 |
| 2008 | 6.01 | 6.09 |
| 2009 | 4.96 | 5.06 |
| 2010 | 4.65 | 4.84 |
| 2011 | 4.49 | 4.66 |
| 2012 | 3.65 | 3.74 |
| 2013 | 3.78 | 3.92 |
| 2014 | 4.13 | 4.24 |
| 2015 | 3.85 | 3.91 |
| 2016 | 3.74 | 3.72 |
| 2017 | 4.04 | 4.03 |
| 2018 | 4.55 | 4.57 |
Choose the Right Mortgage Refi Type
Alaska refinance rates are as diverse as the options available to you, and choosing the right type for your situation can ensure your refi is a good fit. Here are some common types:
Conventional Refi
A conventional refinance, also known as a rate-and-term refi, is a great option for homeowners looking to improve their mortgage terms. Conventional refis typically have higher rates than those for government-backed loans. But this type of refi is ideal for those who want to lower their interest rate or change their loan term. A 15-year refi and an adjustable-rate refi (see below) are two types of conventional mortgage refis. Some lenders offer a no-closing-cost refinance, in which the fees associated with the refi are rolled into the mortgage balance, but this option typically doesn’t have an interest-rate advantage.
Cash-Out Refi
A cash-out refinance is a nifty way for homeowners to leverage their home equity by borrowing more than their current mortgage balance. Let’s say your home is valued at $500,000 and you still have a $300,000 mortgage to pay off. You could potentially borrow up to 80% of your equity, which in this case would be $400,000. After settling your existing mortgage, you’d walk away with $100,000 in hand. This extra cash could be a game-changer for paying off high-interest debt or turning your home into your dream space. (There is also a cash-in refinance option for borrowers with a large lump sum on hand. In this situation, you pay down a portion of the principal to reduce the amount you are borrowing.)
FHA Refi
FHA refinances are tailored for those with existing Federal Housing Administration loans, with two main options: FHA Simple Refinance and FHA Streamline Refinance. These can help you lower your interest rate and monthly payments. If you don’t have an FHA loan, you can consider an FHA cash-out refinance or an FHA 203(k) refinance, which is designed for home renovations. These options may offer more favorable Alaska refinance rates and terms, but they do have specific eligibility requirements.
VA Refi
If you have a current loan from the U.S. Department of Veterans Affairs, a VA refinance, also known as an Interest Rate Reduction Refinance Loan (IRRRL), is a great option. VA loans consistently offer some of the lowest current mortgage refinance rates available in Alaska, which makes them a great option for eligible borrowers looking to refinance their mortgage.
15-Year Mortgage Refi
Here’s a smart move: refinancing to a 15-year mortgage. Although your monthly payments may be higher if you shorten the term (unless you can score a significantly lower interest rate than the one you currently have), shortening the term can shave off a significant chunk of the total interest you’d pay over the life of the loan. A $1 million 30-year mortgage at 7.50% would have you paying around $6,992 monthly and a whopping $1,517,167 in total interest. Now, refinance to a 15-year mortgage at 7.00% and your monthly payment would rise to about $8,988, but the total interest paid would drop to roughly $617,891, saving you close to $900,000. (As noted above, shorter term mortgages often have slightly lower rates than 30-year mortgages.)
Adjustable-Rate Mortgage Refi
An adjustable-rate mortgage (ARM) has a lower introductory interest rate than a fixed-rate loan, which makes it attractive to some homeowners. If you plan to move or sell your home before the rate changes, this could be a good way to lower your monthly mortgage costs. Refinancing into an ARM when rates are low can save you money, but you need to be prepared for the rate and payment to increase in the future if you stay in the home.
Compare Mortgage Refi Interest Rates
Once you’ve explored your mortgage refi type, you’ll want to shop around and compare mortgage refinance rates from different lenders. Compare the annual percentage rate (APR) on different loans. (You can often go through a brief online prequalification process to learn what rate a lender might offer you.) Consider the cost vs. benefit of purchasing discount points (also known as mortgage points), which can lower the rate you’re offered. Look closely at how lenders’ fees contribute to mortgage refinancing costs as well. Which brings us to the next step in the process: using a refi calculator.
Use an Online Refinance Calculators
Throughout the refi process, using an online refinance calculator can help you get a good estimate of what your new monthly payment could be and to compare different refinance options. These calculators take a number of factors into account, including your current loan balance, the interest rates you’re seeing in Alaska, and the terms of the new loan you’re thinking about (15-year vs. 30-year, for example). Here are three useful calculators for your journey.
Run the numbers on your home loan.
-
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.
-
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
When you’re thinking about refinancing your mortgage, it’s important to weigh the potential benefits against the costs and long-term implications. Whether you’re considering a cash-out refinance, FHA refinance, VA refinance, 15-year fixed-rate mortgage, or adjustable-rate mortgage, it’s important to understand your options and compare Alaska refinance rates. By taking the time to explore your options, you’ll make the most of your mortgage.
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
Can you refinance when rates drop?
When interest rates drop is a good time to refinance your mortgage, but it’s important to weigh the potential savings against the costs involved. One way to make sure the refi is worth the work and expense involved is to look at how long you would need to stay in your home before the savings on interest outweigh the fees associated with the refi.
How much does a one-percent reduction in interest lower your monthly payment?
In the world of real estate financing, a mere one percentage-point drop in the interest rate (from 7.00% to 6.00%) for a $300,000 mortgage can make a world of difference. That seemingly small change could reduce your monthly payment by almost $200.
Can I lower my interest rate without refinancing my mortgage?
It’s hard to lower a mortgage interest rate without a refinance, but you can reduce your monthly payments by doing a mortgage recast. A mortgage recast involves making a lump-sum payment toward your principal balance. Your lender can then “recast” your monthly payment amount to reflect the lower principal. If you’re facing financial hardship, you could also explore a loan modification. Of course, if you have a solid credit score and stellar payment history, you can always ask your lender to modify your rate, but the lender is likely to suggest a refi or recast instead.
Can I get equity out of my house without refinancing?
It is 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 your equity. Shop around for home equity lending rates to make sure you’re getting the best deal for your financial situation.
How much are closing costs on a refinance?
When you’re mulling over a mortgage refinance, it’s wise to consider the average closing costs, which usually fall between 2% and 5% of the loan amount. These costs can fluctuate based on the lender, the type of refinance, and the property’s location.
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.
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.
SOHL-Q125-157
More refinance resources.
-
How Much Does It Cost to Refinance a Mortgage?
-
How to Refinance a Home Mortgage Loan
-
7 Signs It’s Time for a Mortgage Refinance
Apply online or call for a complimentary mortgage consultation.
Current Mortgage Refinance Rates in California Today
CALIFORNIA MORTGAGE REFINANCE RATES TODAY
Current mortgage refinance rates in
California.
Apply online or call for a complimentary mortgage consultation.
Compare mortgage refinance rates in California.
Key Points
• Mortgage refinance rates in California are influenced by a variety of economic factors, including the bond market and housing inventory.
• Over recent years, California refinance rates have seen a significant shift, climbing from 3.15% in 2021 to 7.00% in 2023, impacting homeowners’ budgets.
• Refinancing can potentially lower your monthly payments, give you access to home equity, or help you switch to a fixed-rate loan.
• Building your credit score, balancing your debt-to-income ratio, and shopping around for offers from multiple lenders are key to snagging the most favorable mortgage refinance rates in California.
• A 1% drop in your mortgage rate could translate to substantial monthly savings, to the tune of $2,000 a year on a $300,000 loan.
Introduction to Mortgage Refinance Rates
Mortgage refinancing is the process of replacing your existing mortgage with a new one. The new mortgage will have different terms, such as a new interest rate, term length, and monthly payment amount. People refinance their mortgage for a variety of reasons, including to lower their monthly payments, access their home equity, or change their loan type. Understanding how current mortgage refinance rates in California are set and how to get the best rate possible is key to making the most of your refinance. This guide will help you understand the ins and outs of the refinance process and make informed decisions about your property.
💡 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 Refi Interest Rates Come From?
In the past, the 10-year U.S. Treasury Note has served as the most dependable predictor of mortgage rates. When the yield on the Treasury Note increases, current mortgage rates generally rise as well. The housing market also influences rates; if there are too many homes available, lenders may reduce their rates to attract more buyers. The overall economic climate is another key factor. Strong economic performance and job growth usually result in higher interest rates, whereas a recession often leads to lower rates.
While none of this will be on the test, having a loose understanding of what influences interest rates can give you a sense of when rates might rise or fall, allowing you to time your mortgage refinance for maximum savings.
Recommended: How to Refinance a Mortgage
How Interest Rates Affect Home Affordability
Interest rates play an important role in the affordability of your refinance. Your monthly payment hinges on your loan amount, repayment term, and the interest rate you secure. For example, a $200,000 home loan with a 6.00% interest rate and a 30-year term translates to a monthly payment of $1,199. But the same loan with an 8.00% interest rate spikes the monthly payment to $1,467. Over the loan’s life, the lower interest rate could keep nearly $100,000 in your pocket. Even small shifts in current mortgage refinance rates in California can lead to significant long-term savings.
Trends in California Mortgage Interest Rates
The rise and fall of mortgage rates can be quite the rollercoaster. In 2021, the average 30-year fixed mortgage rate was just 3.15%. Fast-forward to 2023, and it had soared to 7.00%. Last year brought the expectation of a dip in rates. But in early 2025, experts are predicting we’ll see elevated rates for longer. But don’t let that deter you. If you’re considering a mortgage refinance, it might still be a smart move.
Historical U.S. Mortgage Interest Rates
The U.S. mortgage interest rate environment can have a huge impact on first-time homebuyers. In the early 2000s, rates were at a level that made homeownership more attainable. That is less true today, even though rates are near the historical average. Below you can see the average fixed mortgage rate from the 1970s to present.
Historical Interest Rates in California
California refinance rates typically follow national trends, but they can be slightly higher or lower depending on the region. In the past, California has seen some of the lowest refinance rates in the country. When national rates are low, California rates are even lower, which is great for homeowners. On the other hand, when national rates are high, California rates are even higher. Understanding the historical trends in California refinance rates can help you anticipate future rate movements and make a more informed refinancing decision.
| Year | California Rate | National Rate |
|---|---|---|
| 2000 | 7.18 | 8.14 |
| 2001 | 6.78 | 7.03 |
| 2002 | 6.20 | 6.62 |
| 2003 | 5.54 | 5.83 |
| 2004 | 5.48 | 5.95 |
| 2005 | 5.65 | 6.00 |
| 2006 | 6.49 | 6.60 |
| 2007 | 6.38 | 6.44 |
| 2008 | 6.13 | 6.09 |
| 2009 | 5.08 | 5.06 |
| 2010 | 4.83 | 4.84 |
| 2011 | 4.54 | 4.66 |
| 2012 | 3.69 | 3.74 |
| 2013 | 3.85 | 3.92 |
| 2014 | 4.04 | 4.24 |
| 2015 | 3.80 | 3.91 |
| 2016 | 3.63 | 3.72 |
| 2017 | 3.94 | 4.03 |
| 2018 | 4.38 | 4.57 |
Why Refinance Your Mortgage?
Refinancing your mortgage can be a smart move. If you can secure a lower interest rate than what you’re currently paying, it could translate to significant savings. Not only could your monthly payments decrease, but you might also pay less in total interest over the life of the loan.
Before you refinance, it’s wise to ensure you have at least 20% equity in your home, especially if you’re considering cashing out some equity. And if you’re currently on an adjustable-rate mortgage and crave the stability of a fixed-rate loan, refinancing can make that happen. California refinance rates are not one-size-fits-all, so shopping around is key to finding the best deal.
Common Reasons to Refinance a Mortgage
Here are common reasons homeowners refinance:
• Lower your interest rate. You may secure a lower rate due to market conditions or an improved credit score.
• Change the repayment term. Shorten it to pay less in interest, or lengthen it to lower your monthly payment
• Cash out home equity. You’ll want at least 20% home equity before considering refinancing.
• Switch to a fixed-rate loan.
• Eliminate mortgage insurance. With an FHA loan, refinancing is the only way to drop the required insurance.
• Consolidate debt.
Understanding these reasons can help you decide if refinancing is right for you. Current California refinance rates play a significant role in this decision.
Recommended: How Soon Can You Refinance a Mortgage?
How to Compare Mortgage Refi Interest Rates
To ensure you’re getting the best deal, you’ll need to shop around. Reach out to multiple lenders and get prequalified to suss out your borrowing power and the rates you’re eligible for. Keep an eye out for the annual percentage rate (APR), which bundles up interest, fees, and discount points. And remember, the lowest rate might not always mean the biggest savings.
Compare California Interest Rates by Mortgage Refi Type
Mortgage refinance rates in California vary by type. Each offers unique features, from fixed vs. variable rates to no closing costs. Knowing your options can help you select the best refi for your needs.
Conventional Refi
A conventional refi, also known as a rate-and-term refi, is your ticket to adjusting your interest rate and loan term. While these refis might not come with the rock-bottom rates of government-backed loans, they do offer a level of flexibility that could be just what you need to lower your interest rate or change your repayment term. If you’re a homeowner with a solid credit history and a good chunk of equity in your home, this could be your golden opportunity.
Cash-Out Refi
You can tap into your home’s equity by refinancing for a larger mortgage and pocketing the difference. A cash-out refinance is a great option for those big-ticket items like home improvements or getting rid of high-interest debt. Let’s say your home is valued at $500,000 and you still owe $300,000 on your mortgage. That leaves you with $200,000 in equity. Many lenders will let you borrow up to 80% of your home’s value, which could mean an additional $100,000 in your pocket after you pay off your existing mortgage.
FHA Refi
FHA loans, insured by the Federal Housing Administration, often come with lower interest rates, making them an attractive option for refinancing. If you already have an FHA loan, you can opt for an FHA Simple Refinance or an FHA Streamline Refinance, which typically have fewer requirements and can be processed more quickly. For those without an FHA loan, options include an FHA cash-out refinance or an FHA 203(k) refinance, which is designed to cover home renovations.
VA Refi
VA loans, backed by the Department of Veterans Affairs, are known for their low interest rates and favorable terms. To qualify for a VA refinance, known as an Interest Rate Reduction Refinance Loan (IRRRL), you must already have a VA loan. This type of refinance can help you secure a lower interest rate, reduce your monthly payments, and potentially eliminate private mortgage insurance.
15-Year Mortgage Refi
Opting for a 15-year mortgage can be a strategic financial move, helping you save money and own your home outright sooner. By refinancing a 30-year, $1 million loan at 7.50% to a 15-year term at 7.00%, you could slash your total interest payments by nearly $900,000. And with current California refinance rates for 15-year mortgages at attractive levels, this could be the perfect time to make the switch.
Adjustable-Rate Mortgage Refi
If you’re considering an adjustable-rate mortgage (ARM) refinance, you’re likely attracted to the initial lower interest rate compared to a fixed-rate mortgage. This can be a smart choice if you’re planning to relocate before the rate adjusts. For instance, if you currently have a 30-year fixed-rate mortgage but foresee a move within a few years, switching to an ARM could mean lower monthly payments. Just be aware that the rate has the potential to increase, which could lead to higher payments down the line.
Compare Mortgage Refi Interest Rates
To ensure you’re getting the best deal, it’s crucial to compare rates from multiple lenders. Look beyond the interest rate to the annual percentage rate (APR), which incorporates fees and any discount points. Calculate the total loan cost and your break-even point (that is, how long it takes for your savings to cancel out the cost of the refinance). Keep an eye on your credit score and home value — the higher they are, the more favorable rates you’ll be offered. And don’t forget to monitor local refinance rates for the best deal.
How to Get the Best Available Mortgage Refi Interest Rate
To secure the best mortgage refinance rates:
• Build your credit score by always being punctual with bill and loan payments.
• Lower your debt-to-income ratio to 36% or less.
• Compare offers from multiple lenders, including brick-and-mortar banks, credit unions, and online lenders.
• Think about buying mortgage discount points.
• Choose the shortest loan term you can afford.
Online Refinance Calculators
Online refinance calculators are a great way to get an idea of what your new monthly payment could be and to compare different refinance options. These calculators take into account your current loan balance, the new interest rate, and the repayment term to give you an estimate of how much you could save by refinancing. You can also see how long it would take to recoup your mortgage refinancing costs.
Run the numbers on your home loan.
-
Mortgage calculator
Punch in your home loan amount and a new interest rate, and we’ll estimate your payoff date.
-
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
Mortgage refinancing is a powerful tool for managing your home loan and achieving financial goals. Whether you’re looking to lower your interest rate, access home equity, or shorten your loan term, understanding the different refinance options is key. By improving your credit score, lowering your debt-to-income ratio, and comparing offers from multiple lenders, you can secure the best available mortgage refinance rates in California. Just make sure to consider the long-term financial implications and that the savings justify the costs involved.
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 new mortgage refinance could be a game changer for your finances.
FAQ
Can I lower my interest rate without refinancing?
If you have some extra cash on hand, you might want to consider a mortgage recast. With a recast, you make a large lump-sum payment toward your principal, and your lender “recasts” your remaining payments. This doesn’t change your interest rate, but it can lower your monthly payments and save you money on interest over the life of the loan. Plus, if interest rates go up in the future, you’ll be locked in at the lower rate.
Can you negotiate a lower interest rate?
You can always reach out to your lender and ask for a reduction in your interest rate. If you’ve been making on-time payments and have a good credit score, your lender may be willing to work with you. Lowering your interest rate could save you a lot of money over the life of your loan. Just be sure to carefully review any changes to your loan’s terms and conditions before you agree to them.
Can I get equity out of my house without refinancing?
You can access your home’s equity without going through the full refinancing process by using a home equity line of credit (HELOC). A HELOC gives you the flexibility to draw funds as needed, typically with lower closing costs than a cash-out refinance. You can use the equity in your home for things like home improvements, debt consolidation, or even paying for college.
Are there fees associated with mortgage recasting?
There are fees associated with a mortgage recast, although they tend to be considerably lower than refinancing fees. Typically, recasting fees can range from $100 to $300, depending on the lender. It’s wise to carefully research and compare fee structures offered by multiple lenders to ensure you secure the most favorable terms for your mortgage recast.
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.
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.
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.
SOHL-Q125-160
More refinance resources.
-
How Much Does It Cost to Refinance a Mortgage?
-
How to Refinance a Home Mortgage Loan
-
7 Signs It’s Time for a Mortgage Refinance
Apply online or call for a complimentary mortgage consultation.
Current Mortgage Refinance Rates in Alabama Today
Apply online or call for a complimentary mortgage consultation.
Compare mortgage refinance rates in Alabama.
Key Points
• Mortgage refinance rates in Alabama are influenced by the 10-year U.S. Treasury Note and housing inventory levels.
• In 2021, the average 30-year fixed refinance rate in Alabama was just over 3.00%. By 2023, it had climbed to 7.00%. In 2025, current mortgage refinance rates in Alabama are expected to remain elevated for longer.
• A mere 1% drop in the interest rate on a $300,000 mortgage can put almost $200 back in your pocket each month.
• In Alabama, you have a variety of mortgage refi options to choose from: conventional, cash-out, FHA, VA, 15-year, and adjustable-rate mortgages, each with its own set of perks and things to consider.
• To lock in the best Alabama refinance rates, build your credit score, trim your debt-to-income ratio, and be sure to compare offers from multiple lenders.
• Keep in mind, a refinance might cause a slight, temporary drop in your credit score due to the hard inquiry.
Introduction to Mortgage Refinance Rates
A mortgage refinance allows you to replace your current mortgage with a new one, potentially with better terms and a more favorable interest rate. Whether you’re looking to lower your monthly payments, shorten your loan term, or tap into your home’s equity, it’s important to understand the factors that determine Alabama mortgage refinance rates. This guide is designed to help you understand those factors and give you tips on how to get the best mortgage refinance rate you can.
Let’s take a closer look at the Alabama market.
💡 Quick Tip: How soon can you refinance your mortgage? It varies by loan type, but typical waiting periods are 6 to 12 months.
Where Do Alabama Mortgage Refi Interest Rates Come From?
In the past, the 10-year U.S. Treasury Note has been the best predictor of where current mortgage rates are heading. If the rates on the Treasury Note increase, mortgage rates typically follow suit. The housing market also plays a role; if there are more homes on the market than buyers, lenders might reduce their rates to attract more customers. Additionally, the state of the overall economy influences interest rates. Strong job growth and a robust economy often lead to higher interest rates, whereas a recession usually results in lower rates.
How Interest Rates Affect Home Affordability
Interest rates play a significant role in the affordability of your home loan, of course, but also your mortgage refinance. Your monthly payments are determined by your loan amount, repayment term, and interest rate. For example, here’s how changes in the interest rate affect the affordability of a $200,000 loan over 30 years:
| 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 |
Over the life of the loan, a lower interest rate could save you close to $100,000. But even a fraction of a percentage point can lead to substantial savings.
Trends in Alabama Mortgage Refinance Rates
As we look to 2025, early predictions suggest that mortgage refinance rates in Alabama may remain elevated for longer. For that reason, it’s important for homeowners to keep an eye on rates and consider their options.
Historical U.S. Mortgage Interest Rates
Mortgage interest rates in the United States have seen dramatic changes over the years. In 2021, the average 30-year fixed mortgage rate was 3.15%, a historic low. By 2023, that rate had risen to 7.00%. These swings mean timing is key when it comes to refinancing your mortgage. Understanding the trends can help you decide when it makes sense to refinance and lock in a lower rate.
Below is a broad look at national rates since 1971.
Historical Interest Rates in Alabama
Alabama’s mortgage refinance rates have been on a similar rollercoaster, mirroring the national scene. In 2021, we saw some of the lowest rates on record, but by 2023, they had shot up. In 2025, it seems they’re here to stay. If you’re a homeowner in Alabama, it’s more important than ever to keep your finger on the pulse of these rates. Staying informed will help you make the best financial decisions when it comes to refinancing and ensure you snag the most favorable rates in the current market.
Here’s a look at almost 20 years of mortgage rates. (The Federal Housing Finance Agency stopped compiling state averages after 2018.)
| Year | Alabama Rate | National Rate |
|---|---|---|
| 2000 | 8.08 | 8.14 |
| 2001 | 6.93 | 7.03 |
| 2002 | 6.54 | 6.62 |
| 2003 | 5.75 | 5.83 |
| 2004 | 5.89 | 5.95 |
| 2005 | 5.98 | 6.00 |
| 2006 | 6.73 | 6.60 |
| 2007 | 6.54 | 6.44 |
| 2008 | 6.02 | 6.09 |
| 2009 | 4.93 | 5.06 |
| 2010 | 4.78 | 4.84 |
| 2011 | 4.51 | 4.66 |
| 2012 | 3.64 | 3.74 |
| 2013 | 3.89 | 3.92 |
| 2014 | 4.23 | 4.24 |
| 2015 | 3.96 | 3.91 |
| 2016 | 3.81 | 3.72 |
| 2017 | 4.19 | 4.03 |
| 2018 | 4.71 | 4.57 |
Why Refinance Your Mortgage?
Refinancing your mortgage can be a smart financial move. If interest rates have dropped since you took out your mortgage, refinancing can help you save money on interest. Or if you have an FHA loan, refinancing to a conventional loan with 20% equity can eliminate mortgage insurance. Whatever your goal, it’s important to make sure you have at least 20% equity in your home before you refinance.
Common Reasons to Refinance a Mortgage
• Lock in a lower interest rate due to improved credit or market conditions.
• Adjust your repayment term: Lengthen it for lower payments, or shorten it to pay off faster.
• Leverage your home equity for a variety of financial needs.
• Switch from an adjustable rate to a fixed rate for stability.
• For FHA loans, ditch mortgage insurance once you hit that magic 20% equity mark.
How to Compare Mortgage Refi Interest Rates
Get a great mortgage refinance rate to save money. Here’s how:
1. Shop around to compare offers from multiple lenders, including brick-and-mortar banks, credit unions, and online lenders.
2. Get prequalified to understand your borrowing power and the rates you’re offered.
3. Look at the APR, which includes interest, fees, and discount points.
4. Crunch the numbers to make sure your savings will outweigh your mortgage refinancing costs.
5. Keep an eye on Alabama refinance rates to seize the perfect moment.
Recommended: No Closing Cost Refinance
Compare Alabama Interest Rates by Mortgage Refi Type
One of the first steps in how to refinance a mortgage is to decide on your main financial goal. Alabama offers a diverse range of mortgage types to cater to the different goals of homebuyers. Choose the best option for your needs.
Conventional Refi
A conventional refinance, also known as a rate-and-term refi, is a great choice for homeowners who want to tweak their mortgage terms. While it might have slightly higher rates than government-backed loans such as FHA, VA, or USDA, it makes up for it with the freedom to adjust your interest rate and loan term.
You could opt for lower monthly payments by extending the loan term (but pay more in total interest) or pay off your loan quicker by shortening the term. This type of refinance is particularly suited for homeowners with solid credit and a good chunk of equity in their home.
Cash-Out Refi
A cash-out refinance is a smart way to leverage your home equity. Picture this: You own a $500,000 home, but you owe only $300,000 on it. That means you’ve got $200,000 in equity (assuming you have no home equity loan or HELOC).
A lender might allow you to borrow up to 80% of that equity, which would leave you with $100,000 after paying off your current mortgage. This could be a game-changer for paying off high-interest debt or tackling those big-ticket items on your wish list.
FHA Refi
FHA refinances, insured by the Federal Housing Administration, often offer lower interest rates, sometimes up to a full percentage point lower than conventional loans. These refis, such as the FHA Simple Refinance and FHA Streamline Refinance, are usually available to homeowners who already have an FHA loan.
If you don’t have an FHA loan, you can still explore an FHA cash-out refinance or an FHA 203(k) refinance, tailored for home improvements. These options can provide financial flexibility and potentially reduce your monthly payments.
VA Refi
VA refinances, backed by the U.S. Department of Veterans Affairs, offer some of the lowest interest rates available. To qualify for a VA refi, known as an Interest Rate Reduction Refinance Loan (IRRRL), you must have an existing VA loan. This type of refinance can help you secure a lower interest rate, reduce monthly payments, and potentially eliminate private mortgage insurance. For veterans in Alabama, exploring VA refi options can be a strategic move to improve your financial standing and reduce the overall cost of your mortgage.
15-Year Mortgage Refi
Refinancing to a 15-year mortgage can be a game-changer, cutting the total interest you pay over the loan’s life, even though your monthly payments will be higher. Let’s say you have a 30-year $1 million loan at a 7.50% interest rate. Your monthly payment would be around $6,992, and the total interest paid would be about $1,517,167. Now, if you refinance to a 15-year mortgage at a 7.00% rate, your monthly payment would jump to approximately $8,988.
But here’s the kicker: You’d slash your total interest paid to roughly $617,891, saving a whopping $900,000. If you can swing the higher monthly payments, this could be the perfect way to pay off your mortgage faster.
Adjustable-Rate Mortgage Refi
Now, let’s talk about adjustable-rate mortgages (ARMs). They typically start with a lower interest rate than fixed-rate loans, but that rate can change based on market conditions. If you’re planning to move before the ARM adjusts, refinancing to an ARM could be a smart move.
For instance, if you currently have a 30-year fixed-rate mortgage but know you’ll be relocating in a few years, switching to an ARM could lead to lower monthly payments and short-term savings. Just be sure to weigh the potential risks and ensure the savings make the switch worthwhile.
How to Get the Best Available Mortgage Refi Interest Rate
These steps can help you maximize savings over the life of your loan.
• Build your credit score by staying on top of payments and steering clear of new debt.
• Keep your debt-to-income ratio under 36% (the lower the better).
• Compare interest rates and fees from multiple lenders.
• Think about buying mortgage points to lower your interest rate.
• Choose a 10- or 15-year loan term for even lower interest rates.
Online Refinance Calculators
Online calculators are a great way to get a rough idea of what your monthly payments will be and to compare different refinance options. They can also help you understand the financial implications of refinancing, including how much you might save on interest and when you might break even. By entering your current loan details and playing around with different scenarios, you can get a better sense of whether refinancing makes sense for you. While a calculator can’t predict the future, it can help you make a more informed decision.
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
Mortgage refinancing is a powerful tool at your disposal, one that can reduce your monthly payments, minimize the interest you pay over time, and unlock your home’s equity. Whether you’re considering a cash-out refi, an FHA refi, a VA refi, or a 15-year mortgage refi, it’s important to weigh your financial goals and the long-term implications. By building your credit score, managing your debt-to-income ratio, and comparing Alabama refinance rates from various lenders, you can secure the best terms and save a significant sum over the life of your 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 new mortgage refinance could be a game changer for your finances.
FAQ
Are refinance rates going to drop?
It is difficult to predict if mortgage rates will drop specifically, as they are affected by national and local economic factors. A better question is whether the money you’ll save by refinancing your mortgage will outweigh the costs of refinancing. This is true no matter what the current refinance rates are. You’ll need to carefully consider the financial implications of refinancing and make sure the decision aligns with your long-term financial goals.
Can I refinance when rates are low?
Absolutely, when rates are on the decline, it’s a prime time to consider refinancing your loan. But before you get started, it’s crucial to weigh the potential savings against the cost of refinancing, which can include a variety of fees and closing costs. You’ll want to make sure that the money you save in the long run will more than cover the expenses you’ll incur in the short term. Be sure to consider the current interest rate environment, the terms of your existing loan, and the costs of refinancing when you’re making your decision.
When is it a good idea to refinance your home?
It’s a smart financial move to refinance your home when you can secure a lower interest rate, reduce monthly payments, or pay off the loan faster. Before proceeding with a mortgage refinance, however, carefully consider the long-term financial benefits and ensure they outweigh the associated costs. Take the time to thoroughly evaluate your options and make an informed decision that aligns with your financial goals and circumstances. Additionally, consider consulting with a qualified financial advisor to gain insights and guidance tailored to your specific situation.
How much does 1 percent lower my monthly payment?
Let’s break it down. A 1% drop in your mortgage interest rate can translate to significant monthly savings. For instance, on a $300,000 mortgage, a 1% reduction from a 7.00% to a 6.00% interest rate could mean a $197 cut in your monthly payment. Use a mortgage refinance calculator to plug in your own numbers and see what the savings are.
Can I lower my interest rate without refinancing?
If you have a chunk of cash on hand, you might consider a mortgage recast. This involves making a large, lump-sum payment toward your principal. Your lender will then recalculate your monthly payments based on the new, lower balance. While this won’t change your interest rate, it can lower your monthly payments and save you a bundle in interest over the life of your loan.
Can I ask my lender to lower my rate?
Absolutely, you can ask your lender to lower your rate. If you have a good credit score and a good payment history, you may be able to get a lower rate. However, the decision to lower the rate is up to your lender, and there are a number of factors that they may take into consideration.
Can I get equity out of my house without refinancing?
Yes, you can pull equity out of your home without having to refinance. You can do this by taking out a home equity line of credit (HELOC). A HELOC allows you to borrow a large portion of the home’s value, up to 85%, and you will have a variable interest rate credit line to use. This can be a great way to access funds without having to go through the traditional refinance process.
What are the costs of mortgage recasting?
There is a fee to recast your mortgage. However, it’s typically much less than the fees you’d pay to refinance. Lenders may charge a few hundred dollars or so to recast your mortgage, but the exact amount can vary. Be sure to compare the cost of recasting your mortgage to the potential savings to make sure it’s a good move for you.
How much are closing costs on a refinance?
On average, closing costs for a refinance are typically 2% to 5% of the loan amount. That means if you’re refinancing a $300,000 mortgage, your closing costs could run anywhere from $6,000 to $15,000. That’s a significant amount of money, and it’s important to keep it in mind when you’re budgeting for a refinance. It’s also a good idea to shop around and compare closing costs from a few different lenders. By doing your homework, you could save hundreds or even thousands of dollars on your closing costs.
Does refinancing have an impact on your credit score?
Pursuing a refinance can cause a temporary dip in your credit score, but the impact is usually minor and short-lived. In fact, a refinance can have a positive effect on your credit in the long run by lowering your credit utilization ratio and diversifying your credit mix.
Do you have to pay closing costs again when you refinance?
Yes, you will need to pay closing costs again. These costs can include an appraisal fee, title insurance, and other miscellaneous expenses. Be sure to factor these costs into your decision, as they can add up quickly and potentially negate any savings you may be expecting to achieve through refinancing. Additionally, compare the interest rates and terms of your current mortgage with the new loan to make sure that refinancing makes financial sense for you.
How many times can you refinance your home loan?
Refinancing your home is a big decision and one that should be carefully considered. You may refinance your home as many times as you’d like, but there are associated costs with each loan. Also, refinancing your home could impact your credit. You’ll need to weigh the pros and cons and consider your short-term and long-term goals.
SoFi Mortgages
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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.
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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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.
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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
Apply online or call for a complimentary mortgage consultation.
Is 609 a Good Credit Score?
Is 609 a Good Credit Score?
By Rebecca Lake
A credit score of 609 is not considered good. It falls into the fair category, which is below the good tier, but above the poor one, according to the FICO® credit scoring model.
With a 609 credit score, you may be able to access forms of credit, but you will likely pay higher interest rates and enjoy less favorable terms than those with a higher score. Here’s how this score can affect your ability to borrow.
Key Points
• A 609 credit score is categorized as fair (the range from 580 to 669), which is below the good tier.
• Credit card options with a 609 score may include higher interest rates and annual fees.
• Auto loans for a 609 score typically come with higher interest rates, increasing total interest paid.
• A 609 score can limit conventional mortgage options, though USDA, VA, and FHA options may be available.
• Personal loans are possible with a 609 score, but evaluate interest rates carefully before signing up, especially if consolidating credit card debt.
What Does a 609 Credit Score Mean?
FICO credit scores, which are used by 90% of top lenders to qualify borrowers, range from 300 to 850, with 850 being the highest score you can attain.
Here are the ranges:
• Exceptional (or excellent) credit: 800-850
• Very good credit: 740-799
• Good credit: 670-739
• Fair credit: 580-669
• Poor credit: 300-579
These scores are composed of five factors:
• Payment history: 35%
• Credit utilization: 30%
• Credit history: 15%
• Credit inquiries: 10%
• Credit mix: 10%
According to FICO, a 609 credit score translates to a fair credit rating, as noted above. Fair credit means your score is lower than the average American’s, but some lenders will still extend credit to you. For perspective, the average FICO score was 715 in 2024, according to Experian.
Fair credit won’t make borrowing impossible, but it can make it more expensive. A 609 credit score typically means you won’t qualify for the lowest interest rates. Those are usually reserved for people with very good or exceptional credit, which means a FICO score of 740 or higher.
What Else Can You Get With a 609 Credit Score?
Is 609 a bad credit score? Technically, no; FICO rates a score below 580 as poor credit. With a score in that range, you might find it difficult to get approved for loans or credit cards, and if you do, you may face significantly higher interest rates.
So, what can a 609 credit score get you? You can likely qualify for a credit card, a car loan, and some mortgages and personal loans, though they may be expensive. Here’s a closer look.
Can I Get a Credit Card With a 609 Credit Score?
Credit cards are convenient when you need to pay for things on the go, and it’s possible to get a credit card with a 609 credit score. For an unsecured card, you may be able to obtain a card, but it will likely involve a higher interest rate than those with good or better credit, and it will probably lack any kind of credit card rewards. (You will probably have to pay an annual fee, too.)
Another option: You might apply for a secured credit card, which can help build credit. Here’s the difference:
• Secured credit cards usually require a cash deposit to open, which doubles as your credit limit.
• Unsecured credit cards don’t require a deposit.
Either type of card could help you build good credit if you practice good habits. That includes paying your bill on time each month and keeping the balance low relative to your credit limit (this is known as your credit utilization ratio). Payment history and credit utilization carry the most weight in FICO credit scoring.
It can be difficult to know which credit cards you can get with a 609 credit score, since credit card companies usually don’t publish minimum credit score requirements online. They may, however, market certain cards as being designed for people with fair credit, which can help you decide which ones to apply for.
Worth noting: Hard inquiries (meaning applications for new credit) can temporarily lower your credit score by several points, so it’s better to just pick one credit card to apply for at a time.
Can I Get an Auto Loan With a 609 Credit Score?
A 609 credit score car loan approval isn’t unheard of. You’ll need to find a lender willing to offer you financing. Some lenders specifically target borrowers with lower credit who may not be able to get approved for a car loan through a bank or online lender.
The downside of getting a car loan with a 609 credit score is that you’ll most likely pay more interest. Again, that’s because lenders reserve the lowest rates for borrowers with the highest credit scores.
So how much could you pay? Here’s what borrowers in the fair credit score range paid on average for car loans in the third quarter of 2024:
• New car buyers paid 9.73%
• Used car buyers paid 14.07%
By comparison, buyers with excellent credit paid 5.08% for new car loans and 7.41% for used car financing on average.
Here’s an example to review:
• If you got a $20,000 used car loan with a 48-month repayment term at a 14.07% APR, your monthly payments would be $547, and you’d pay $6,267 in interest over the life of the loan.
• Now, if you built your credit and qualified for a 7.41% APR instead, your monthly payment would drop to $483, and you would pay just $3,171 in total interest.
Those numbers could be a great incentive to work on building your score before applying for a car loan.
Can I Get a Mortgage With a 609 Credit Score?
A 609 credit score isn’t a barrier to getting a mortgage, but it may limit your loan options. For example, most lenders require a minimum credit score of 620 to qualify for conventional mortgages, as well as VA and USDA loans.
That said, some VA and USDA lenders will review your application and may fund your loan, even if your credit score is below 620.
You could also qualify for an FHA loan with a FICO score as low as 500. FHA loans are federally insured loans that are designed to help people buy homes, even when their credit isn’t perfect. If you’re in the 609 credit score range, you could buy a home with as little as 3.5% down (or 10% if your score ranges from 500 to 579) and access a favorable interest rate.
The best way to find a good FHA loan rate for fair credit is to shop around and compare rates from multiple lenders. Look for lenders that offer free rate quotes without affecting your credit scores.
Recommended: How Many Personal Loans Can You Have at Once?
Can I Get a Personal Loan With a 609 Credit Score?
Personal loans can put cash in your hands when you need it, whether for a big dental bill or the cost of a vacation. It’s possible to qualify for one with a 609 credit score, albeit probably at a higher interest rate than you’d be offered if your score was higher.
As with mortgages or car loans, it’s important to shop around. Compare personal loan rates, terms, and fees. If you’re getting a credit card consolidation loan to streamline your debts, it’s important to make sure the loan rate you qualify for is less than what you’re paying to your cards. Otherwise, consolidating might not save any money.
To really dig into the numbers, use a personal loan calculator to estimate what you might pay, based on different loan rates and terms.
The Takeaway
A 609 credit score isn’t considered good. Rather, it falls into the tier below that, which is fair. While you can qualify for some forms of credit, it will likely be at higher interest rates and with less favorable terms than if your score was higher. Carefully review options, whether for a credit card or personal loan, to make sure you understand the fine print.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.
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.
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.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®
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