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Comments Off on Houses Are Expensive. One Solution? Everyone Lives Together
If you’re in the market for a house, it’s the time of year you’d normally get excited to start searching.
But between the price of real estate and the cost of borrowing, buying a home in 2025 is expensive. And the latest economic headwinds could wind up making a purchase feel even more out of reach.
So how can you adapt? One increasingly popular option is to house more family under the same roof.
A survey released this week by the National Association of Realtors shows 17% of homes purchased between June 2023 and June 2024 were for some combination of parents, grandparents, adult children and/or adult siblings. That’s up from 14% in each of the previous two years and the most since NAR started measuring in 2012.
While multi-generational living is hardly a new trend, it’s become steadily more common in recent decades. A big factor is the growth in racial and ethnic groups that are more apt to live in multi-generational houses, according to Pew Research.
But an increase in job losses and foreclosures during the Great Recession of 2007-2009 also accelerated the movement toward pooling financial resources.
Similar economic factors would appear to be at play now, with saving money being cited most often among the latest batch of multi-generational buyers surveyed by NAR, particularly Millennials.
In fact, 36% of buyers said they bought for “cost savings,” up from 22% in the previous 12 months. (In contrast, there was a slight decline in the percentage of buyers who attributed the purchase to caring for aging parents or because adult children or other relatives were moving back home.)
So what? Millennials had been the biggest contingent of homebuyers for years, but are now behind baby boomers. Without proceeds from the sale of a previous home to rely on, high rents, student loan debt and child care costs have made it difficult for many of them to come up with a down payment.
But thinking outside the box can help. There are still creative ways to adapt to this daunting housing market.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
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• Mortgage refinance rates are influenced by economic factors such as the bond market and housing-market demand.
• A 1% drop in your mortgage refinance rate could translate to real savings — potentially hundreds of dollars off monthly payments.
• Refinancing to a 15-year mortgage can save significant amounts. Monthly payments may be larger, but less interest is paid overall.
• Homeowners should aim for at least 20% equity in a home before considering a cash-out refinance.
• Closing costs for a mortgage refinance usually fall between 2% and 5% of the loan amount, and should be factored into total costs.
Introduction to Mortgage Refinance Rates
Some people dream of a new home. Others just dream of a new home loan. A mortgage refinance lets the latter group achieve their dream. It’s like a reset button for your mortgage. A refinance gives you the chance to change the terms of your mortgage. Whether you’re looking to lower your monthly payments, pay off your loan faster, or get cash from the equity you have in your home, the type of refinance you choose can affect your financial future. This guide will help you understand how mortgage refinance rates are set and how to obtain the best rate you can. First step? Understanding where mortgage interest rates come from and why they change so much.
💡 Quick Tip: Wondering how to refinance a mortgage? The process, which takes about 30 to 45 days, is similar to when you got your original home loan.
Where Do Mortgage Refi Interest Rates Originate?
The interest rate you’ll be offered if you pursue a mortgage refinance is influenced by various economic forces as well as your personal financial profile. Key economic factors include the performance of the 10-year U.S. Treasury Note. When its rate rises, mortgage interest tends to head in the same direction. Another factor is the housing market. When the market cools, 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 weakness is usually accompanied by lower interest rates. By closely monitoring these factors, you may be able to anticipate changes in rates and make informed decisions regarding the optimal time to refinance your mortgage.
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Interest rates play a pivotal role in the cost of your mortgage refinance. Your monthly payment hinges on your loan amount, the term of repayment, and the mortgage refinance rate you secure. Here’s a look at how term and rate changes play out for 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 Kentucky?
Refinancing your mortgage can be a savvy financial move if current interest rates are noticeably lower than the rate you have on your existing mortgage. But there are additional reasons that a refi might make sense.
Common Reasons to Refinance a Mortgage
• You qualify for a lower interest rate because your credit score has improved since you purchased your home.
• You want to trim down your repayment term to pay off your loan more quickly and save money on interest, or perhaps you want to extend your repayment term to make monthly payments more manageable.
• You need to tap into your home equity for expenses like college tuition.
• Your adjustable-rate mortgage is about to change, and you want to switch to a fixed-rate loan.
• You have an FHA loan (backed by the Federal Housing Administration) and 20% equity, and you want to eliminate the FHA mortgage insurance premium.
How to Get the Best Available Mortgage Refi Rate
If you have a good reason to refinance, your next step is preparing your finances so that you’ll present to a potential lender in the best possible light. Here are some steps to help you get the best available rate:
• Take good care of your credit score: Timely payments and avoiding new debt can give your score a lift if it isn’t already in sparkling shape.
• Check your equity. If you’re wondering how soon can you refinance a mortgage, the general rule of thumb is that you will need 20% equity. This is especially true for a cash-out refinance (more on that below).
• Reduce your DTI: Aim for a debt-to-income (DTI) ratio of 36% or less to keep your financial house in order. (To determine your DTI ratio, add up your monthly debts and divide by your gross monthly income; multiply by 100.)
• Examine your cash on hand to determine whether you might be able to purchase mortgage points, also known as discount points, to reduce your interest rate.
• Get a handle on your monthly budget so you’ll be able to determine whether a 10- or 15-year mortgage term will work for you. Although it may mean higher monthly payments, a shorter term usually equals less interest paid overall.
Understand Trends in Kentucky Mortgage Interest Rates
As you’re looking at current mortgage rates in Kentucky, it helps to have a sense of context. The chart below shows how closely Kentucky’s rates have stayed to the national average over a span of almost 20 years. (The Federal Housing Finance Agency stopped tracking states after 2018.) It’s important to keep an eye on the market and stay informed about where rates are today and where they may be heading.
Historical U.S. Mortgage Interest Rates
You might have an ideal interest rate in mind, a point at which you’ll feel good about refinancing. But as you’re waiting for an interest rate drop, study the history of rates in the U.S. to make sure your expectations are realistic. Below you can see more than a half-century of rates. Those who remember the rock-bottom rates of early 2021 may be awaiting a drop below 4.00% or 5.00%. But as you can see from the graph below, those rates don’t come around very often.
Historical Interest Rates in Kentucky
As you can see, the average rate rarely varies by more than a point year over year.
Year
Kentucky Rate
National Rate
2000
8.09
8.14
2001
7.00
7.03
2002
6.49
6.62
2003
5.68
5.83
2004
5.71
5.95
2005
5.94
6.00
2006
6.62
6.60
2007
6.48
6.44
2008
6.12
6.09
2009
5.09
5.06
2010
4.84
4.84
2011
4.53
4.66
2012
3.67
3.74
2013
3.86
3.92
2014
4.18
4.24
2015
3.85
3.91
2016
3.77
3.72
2017
4.00
4.03
2018
4.65
4.57
Source: Federal House Finance Agency
Choose the Right Mortgage Refi Type
As you explore a possible refinance and get acquainted with average rates, it’s important to remember that current mortgage refinance rates in Kentucky vary by the type of mortgage refi you choose. These are some of the most common types:
Conventional Refi
Conventional loans are very popular, and a rate-and-term refinance with a conventional loan may let you lower your interest rate, change your loan term, or both. These loans typically have a higher refinance rate than government-backed loans such as FHA loans. However, they are very flexible. To be eligible for a conventional refinance, you typically need a good credit score and adequate equity in your home.
15-Year Mortgage Refi
As noted above, some borrowers refinance from a 30-year loan into a shorter-term one. Even if you’re able to snag a lower interest rate than you currently have, you may pay more per month than you would with a longer term. But over the life of the loan, you’ll actually significantly trim your interest costs. Some people switch to a 15-year term so they can pay off their mortgage before retirement, and they find higher payments are doable because they are in their peak earning years.
Adjustable-Rate Mortgage Refi
An adjustable-rate mortgage (ARM) starts you out with a lower initial mortgage refinance rate than a fixed-rate loan. But the rate can change over time. If you’re planning to move before the rate adjusts, refinancing from a 30-year fixed mortgage to an ARM can help lower your monthly payment in the short term and save on interest. An ARM could also be a good choice if you’re looking to take advantage of potential interest rate decreases in the future. Just be sure you understand how much your monthly payment could change and how quickly it could increase.
Cash-Out Refi
A cash-out refinance is a way for homeowners to access the equity in their homes by borrowing against it. The rates for these types of refinances are usually a bit higher than the rates for a standard refinance. If your home is worth $500,000 and you owe $300,000, you have $200,000 in equity. A lender may allow you to borrow up to 80% of your equity with a new loan. If you refinance and borrow, say, $100,000, you’ll owe more than you did going into the refi. But it’s a good way to borrow a large sum for a renovation or debt consolidation, and interest rates on home loans are typically lower than those on unsecured loans.
FHA Refi
FHA loans often come with favorable mortgage refinance rates. An FHA Simple Refinance or FHA Streamline Refinance is available to homeowners who currently have an FHA loan. However, even if you don’t have an FHA loan, you can choose an FHA cash-out refinance or an FHA 203(k) refinance. The latter is specifically for home improvement and renovation projects.
VA Refi
VA loans, backed by the U.S. Department of Veterans Affairs, consistently offer some of the most competitive mortgage refinance rates available. In order to qualify for a VA refinance, also known as an Interest Rate Reduction Refinance Loan (IRRRL), you must have an existing VA loan.
Compare Mortgage Refi Interest Rates
Once you’ve zeroed in on the type of refinance you want to undertake, it’s time to research rate offers. Take these steps:
• Shop around and get rates and fees for your refi from multiple lenders.
• As you compare offers, examine the annual percentage rate (APR) of each loan, which includes the interest rate and fees. Make sure you factor in all costs associated with the loan, including discount points.
• Evaluate the break-even point to decide if the savings are worth the costs. Find the break-even point by dividing the closing costs by the monthly savings from your new payment. Let’s say refinancing causes a payment to decrease by $150 a month. If closing costs are $3,000, it would take 20 months to recoup the costs and start to see savings.
A refinance calculator will be a useful tool during this process.
Use an Online Refinance Calculator
Online refinance calculators are a great way to figure out what your new monthly payment will be and to compare different refinance options. They can help you understand the impact of different mortgage refinance rates and terms, so you can make an informed decision about whether refinancing makes sense for you. By using these tools, you can carefully consider the potential financial implications of refinancing your mortgage, and make a decision that’s right for you and your financial situation.
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’s not something you should rush into. By working to improve your credit score and lower your DTI ratio, and by comparing refinance rates in Kentucky from multiple lenders, you can increase your chances of getting a better deal. Whether you’re considering a cash-out refinance, an FHA refinance, a VA refinance, or a 15-year fixed-rate mortgage, the key is to make sure that the refinance makes sense in the context of your broader financial situation and long-term goals.
SoFi can help you save money when you refinance your mortgage. Plus, we make sure the process is as stress-free and transparent as possible. SoFi offers competitive fixed rates on a traditional mortgage refinance or cash-out refinance.
A mortgage refinance could be a game changer for your finances.
There’s no way to 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. Watch the current refinance rates in Kentucky so you’ll know when the time is right to move forward on a refinance.
When is it a good idea to refinance your home?
Of course it’s a good idea to refinance if you can get a substantially lower interest rate on the new loan. But refinancing your home can also be a smart financial move if it helps you consolidate debt in a cash-out refi, or pay off your mortgage before retirement. One important thing is 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 request a rate reduction from my lender?
You can approach your lender and ask for a lower mortgage rate, using the current mortgage refinance rates in Kentucky as a guide. If you have a high credit score and make your payments on time, you’re in a good position to negotiate. But don’t be surprised if your lender says no and suggests a refinance instead.
How much are closing costs on a refinance?
Average closing costs for a refinance usually fall between 2% and 5% of the loan amount. They can fluctuate based on the lender, the type of refinance, and the property’s location and can encompass a variety of fees, including the appraisal and title insurance fee.
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• Mortgage refinance rates are influenced by a variety of economic factors, including the Federal Reserve’s policies, inflation, and the bond market. Your personal financial profile will also play a role in the rates you are offered.
• In Indiana, refinance rates have shifted dramatically in the last few years, from a low of 3.15% in 2021 to a 7.00% high in 2023.
• A 1.00% drop in your mortgage rate in Indiana could translate to substantial monthly savings — around $2,000 a year on a $300,000 loan.
• Government-backed loans such as FHA and VA may offer you lower mortgage refinance rates and more flexible criteria. These loans are accessible to a broad range of borrowers.
• Closing costs for mortgage loan refinancing usually fall between 2% and 5% of the loan amount. Measure these costs against your potential savings to determine if a mortgage refinance is the right move for you right now.
Introduction to Mortgage Refinance Rates
To start: What is a mortgage refinance? It’s what you do to give your current home loan a makeover. Your new loan may have different terms that can be more favorable than those of your existing mortgage. You also may be able to lower your interest rate.
Homeowners thinking about refinancing can find a lot of different motivations for doing it, in Indiana and elsewhere. Maybe you’re hoping to lower your monthly overhead, or to tap some of your equity for a bathroom renovation. How soon can you refinance a mortgage? It is going to depend on a number of factors.
This guide will help you understand how mortgage refinances work and how to get the best rates in today’s market, focusing on factors that affect Indiana homeowners.
Mortgage refinance rates are influenced by outside economic factors and your personal financial profile. When it comes to economics, the most important variables include Federal Reserve policy, inflation, and housing inventory. The bond market, and especially the performance of the 10-year U.S. Treasury Note, plays a key role in determining current mortgage rates. When the yield on the Treasury Note increases, mortgage interest rates generally rise as well.
In times of high inflation, mortgage rates often climb, but when inflation is in check, you might see interest rates drop. The Fed’s monetary policy and the bond market also play parts in this financial symphony. Knowing more about these factors can help you feel educated to make the best decisions about refinancing your mortgage.
Don’t forget to consider your own financial scenario. Having a strong credit score — which is determined by such factors as your history of on-time payments, your credit utilization ratio, and your credit mix (like, having managed any installment loans and credit lines you hold responsibly) — is a definite asset when you apply for a mortgage refi.
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Looking to refinance your mortgage? Interest rates in Indiana are sure to play a major role in what you can afford to do. Your monthly payment will be based on the loan amount, the term of the loan, and the interest rate you’re offered. For example:
A $200,000 home loan with a 6.00% interest rate and a 30-year term will require a monthly payment of $1,199. But the exact same loan with an 8.00% interest rate would give you a monthly payment of $1,467.
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
Secure a lower interest rate and you can save tens of thousands of dollars over your loan term, which could seriously impact your financial state. It could also play a role in achieving long-term goals like starting your own business or financing your child’s college tuition.
Why You Should Refinance Your Mortgage in Indiana
Refinancing your mortgage offers a number of benefits, depending on the financial goals you have. If current interest rates are lower than what your existing mortgage has, refinancing can most likely reduce your monthly payments and save you money over the loan’s life. Refinancing can help you switch, too, from an adjustable-rate mortgage to one with a fixed rate for savings in the long run. Another great approach is to refinance a 30-year mortgage to a new 15-year term, which can save you a lot of money in the long run.
Remember that refinancing a mortgage will almost always involve closing costs. A no-closing-cost refinance sounds like a real find, but they are often too good to be true — those charges will probably get rolled into the new mortgage, or you’ll pay a higher interest rate.
Whatever your reason for wanting to do it, you should have 20% equity or more in your home before you push play on a refinance, especially if you want to cash out some of your equity.
Common Reasons to Refinance a Mortgage
These are some of the more common goals of homeowners who refinance their mortgages:
• Qualifying for a lower interest rate thanks to improved credit or market conditions.
• Adjusting the repayment term to make monthly payments more manageable, or to pay off the loan more swiftly.
• Tapping into home equity in order to fund significant expenses, like a home remodel.
• Wanting to switch to a fixed-rate loan, since an adjustable-rate mortgage reset is coming soon.
• Wanting to get mortgage insurance out of your life when you have an FHA loan and 20% equity.
• Considering a debt consolidation, or releasing a cosigner.
Your financial history always has an impact on interest rates that lenders offer you in Indiana. Homeowners with strong credit and low debt-to-income ratio may secure lower rates than those with less-ideal profiles.
To secure a competitive mortgage refinance rate, here’s what you should work on:
• Bolster your credit score by paying your bills on time and steering clear of new debt.
• Maintain a debt-to-income ratio under 36%.
• Explore offers from multiple lenders.
• Think about buying mortgage discount points to lower your interest rate.
Once you’ve achieved an optimal credit history, it’s time to deep-dive into rate trends.
Examining Trends in Indiana Mortgage Interest Rates
No one can predict with certainty where rates are headed at any given moment, but by understanding where they’ve been, you’ll be better equipped to make a decision right for you.
Historical U.S. Mortgage Interest Rates
Here’s a longer view of national mortgage rates. You can see that rates in the early 2000s were at around 6.00%. In 2020, they dropped lower, to under 3.00%. This decrease planted the idea in people’s minds that low rates were “normal.” In 2023, however, they rose again. Soon they were hitting around 7.00%.
A lot of people today complain about high interest rates. Current mortgage refinance rates, however, remain below the 50-year average.
Historical Interest Rates in Indiana
Below, compare Indiana and U.S. nationwide rates from 2000 to 2018 — they’re similar but not identical. (The Federal Housing Finance Agency stopped compiling state averages after 2018.)
Year
Indiana Rate
National Rate
2000
8.13
8.14
2001
7.08
7.03
2002
6.67
6.62
2003
5.97
5.83
2004
5.89
5.95
2005
5.97
6.00
2006
6.67
6.60
2007
6.55
6.44
2008
6.14
6.09
2009
5.39
5.06
2010
5.01
4.84
2011
4.97
4.66
2012
3.71
3.74
2013
4.05
3.92
2014
5.24
4.24
2015
4.01
3.91
2016
3.86
3.72
2017
4.19
4.03
2018
4.75
4.57
Source: Federal House Finance Agency
Choose the Right Mortgage Refi Type
The type of mortgage refinance you choose will influence the interest rate you’re offered. Some refi loans trend higher or lower, and that’s good to keep in mind when considering refinancing options.
Conventional Refi
A conventional mortgage refinance, also known as a rate-and-term refinance, is a popular choice for homeowners who want to enhance their mortgage terms. These refis often carry higher rates than government-backed loans such as FHA, VA, or USDA, but they provide increased flexibility and potential to waive PMI, or private mortgage insurance, if you have at least 20% in home equity. This type of refinance is an excellent option for a homeowner aiming to reduce an interest rate or adjust their loan term. Two types of conventional refis are a 15-year term refi and and adjustable-rate refi:
15-Year Mortgage Refi
Now, let’s talk about a 15-year mortgage refinance. This option can really be a game-changer. It will help you cut down the total interest you’ll pay over the loan’s life, even though you’ll have higher monthly payments.
On a 30-year, $1 million loan at a 7.50% rate, for instance, you’d be looking at a monthly payment of around $6,992 and a whopping $1,517,167 in total interest over the life of the loan. If you refinanced to a 15-year term at a 7.00% rate, you would see your monthly payments rise to about $8,988 — but the total interest would drop to roughly $617,891, saving you close to $900,000 in interest.
Shorter loan terms save you money in a couple of ways: by reducing the time you’re paying interest on the loan, and by offering slightly lower interest rates than loans with longer terms do.
Adjustable-Rate Mortgage Refi
Adjustable-rate mortgages (ARMs) usually start with a lower interest rate than fixed-rate loans, but the rate changes over time. If you plan to move before the rate adjusts, an ARM may be a good option for you. In the short term, you can save on monthly payments and get the financial breathing room to set sights on your next home.
Cash-Out Refi
Cash-out refinances are a popular way to leverage home equity. This type of loan can put a lump sum in your hands that you can use for a range of financial needs, from home improvements to consolidating high-interest debt. Here’s one example: Your home is worth $500,000 and your current mortgage balance is $300,000, so you have $200,000 in equity. A lender may allow you to borrow up to 80% of your equity. In that case, you’d be left with $100,000 after you paid off your existing mortgage. This can be a great approach to tackling debt or financing a big-ticket item.
FHA Refi
FHA loans are insured by the Federal Housing Administration, and often come with lower interest rates, making them attractive for refinancers. If you have an FHA loan already, you can opt for an FHA Simple Refinance or an FHA Streamline Refinance to potentially lower your rate. If you don’t have an FHA loan, options include an FHA cash-out refinance or an FHA 203(k) refinance, which is designed for home renovations and repairs. By choosing one of these alternatives, you can get financial flexibility and possibly lower monthly payments.
VA Refi
VA loans, backed by the Department of Veterans Affairs, are known for offering some of the most competitive interest rates in the mortgage market. If you want to qualify for a VA refinance, also known as an Interest Rate Reduction Refinance Loan (IRRRL), you’ll need to have an existing VA loan. This type of refinance can lower your monthly payments and remove the need for private mortgage insurance for eligible veterans and their families.
Compare Mortgage Refi Interest Rates
To ensure you’re getting the best deal, you’ll want to compare rates from multiple lenders in Indiana. In fact, it’s smart to look beyond interest rates to the annual percentage rate (APR).
APR is a handy equation that incorporates both fees and any discount points you’ve got. Calculate the total loan cost, as well as your break-even point (that is, how long it takes for the money you save to cancel out the out-of-pocket cost of the refinance). Keep an eye on your credit score and your home’s value — the higher they are, the more favorable rates you’ll receive offers for. Don’t forget to peruse local refinance rates for the best deal.
How Can You Get the Best Available Mortgage Refi Interest Rate?
Knowing refinance rates will be crucial for homeowners in Indiana who are looking to secure a competitive mortgage rate. Follow these tips:
• Compare rates from multiple lenders.
• Get prequalified — it can let you see your borrowing power and rates without triggering a hard credit check.
• Compare APRs vs. interest rates, which include interest costs, fees, and discount points.
• Evaluate and crunch the numbers to see if lower rates will trigger higher long-run costs.
• Use a calculator to estimate your savings.
💡 Quick Tip: Wondering how to refinance a mortgage? The process, which takes around 30 to 45 days, is similar to when you got your original home loan.
Online Refinance Calculators
An online refinance calculator can be helpful. It will give you an idea of what your new monthly payment could be, and help you compare different refinance options. These calculators take into account your current loan balance, the interest rate on a potential new loan, and the repayment term, giving you an estimate of how much you could save by refinancing. You can also use it to see how long it would take to recoup your mortgage refinancing costs.
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 to help you manage your home loan and achieve financial goals. Whether you hope to lower your interest rate, access home equity, or shorten your loan’s term, understanding the different refinance options is key. If you improve your credit score, lower your debt-to-income ratio, and compare offers from multiple lenders, you can secure the best available mortgage refinance rates in Indiana. Just consider the long-term financial implications and make sure 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 mortgage refinance could be a game changer for your finances.
When you can lock in a lower interest rate, consolidate your debt, or meet other important financial goals, a mortgage refi might be a good financial decision. Do the math and figure out at what point the cash you’ll save after your refi will exceed the money you’ll spend on the refi itself. How long will you stay in your home? If you’ll end up moving before you’ve recouped the cost of your refi, it won’t make sense.
Can I draw cash out of my house without refinancing?
You can tap into your home’s equity to get money without a refinance. Request a home equity line of credit (HELOC), or take out a home equity loan. These options can all be great ways to pay for home improvements, consolidate debt, or cover other pop-up expenses. Technically, a HELOC or home equity loan is a second mortgage (assuming you still have your first one). It’s important to find the most competitive interest rate during the application process.
Is it possible to lower my interest rate without refinancing?
It’s hard to lower a mortgage interest rate without a refinance. You can reduce your monthly payment, though, by doing a mortgage recast. This move involves making a lump-sum payment toward your principal balance. Your lender can then “recast” your monthly payment amount. If you are facing financial hardship, you can also ask your lender about a loan modification. But lenders tend to suggest a refi or a recast first.
Are refinance rates going to drop anytime soon?
There’s no crystal ball that predicts future mortgage rates, but look at key indicators and you may 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 future. Keep an eye on the current refinance rates in Indiana so you’ll know when the time is right to refinance.
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.
‡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.
• Mortgage refinancing can help reduce monthly payments, shorten a loan’s duration, or unlock home equity.
• Mortgage refinance rates in Idaho are influenced by the 10-year U.S. Treasury Note and housing inventory levels, among other factors.
• Borrowers who can manage somewhat higher monthly payments might refinance to a 15-year mortgage and pay less in total interest over the life of the loan.
• VA refinances, supported by the U.S. Department of Veterans Affairs, are known for their competitive interest rates, making them a smart choice for those who qualify and are eligible in Idaho.
• A refinance might cause a slight, temporary drop in the borrower’s credit score due to the hard credit inquiry.
Introduction to Mortgage Refinance Rates
Mortgage refinancing is the process of replacing your current home loan with a new one featuring updated terms and a different interest rate. Whether your goal is to lower your monthly payments, pay off your loan sooner, or take cash out of your home, the type of mortgage refinance you choose will play a big role in the interest rate you get. Below, we’ll explain how mortgage refinance rates are determined and give you some tips for getting the best rate possible. We’ll also cover the latest mortgage refinance rates in Idaho to help you make an informed decision.
Current mortgage rates for a refinance are a product of various economic and personal financial factors. On a large scale, they’re influenced by the bond market, specifically in the performance of the 10-year U.S. Treasury Note. When the rates on the note rise, mortgage interest tends to rise as well.
Another factor is the performance of the housing market. When the market cools and more homes are available than there are buyers, lenders may lower rates to keep attracting customers. A strong jobs market and economic growth can lead interest rates to rise, while a recession is usually accompanied by lower interest rates.
Get matched with a local
real estate agent and earn up to
$9,500‡ cash back when you close.
Pair up with a local real estate agent through HomeStory and unlock up to $9,500 cash back at closing.‡ Average cash back received is $1,700.
Your monthly payment is a product of your loan amount, repayment term, and interest rate, so interest rates play a big role in the affordability of your refinance. The chart below shows how different interest rates affect the size of the monthly payment and the total interest paid on a $200,000 loan.
Interest Rate
Monthly Payment
Total Interest
6.00%
$1,199
$231,677
6.50%
$1,264
$255,085
7.00%
$1,330
$279,021
7.50%
$1,398
$303,403
8.00%
$1,467
$328,309
Why Refinance in Idaho?
Homeowners refinance their mortgages for various reasons. If interest rates are lower than your current rate, refinancing could certainly save you money. To qualify for a refinance, you typically need at least 20% equity in your home. Here are more reasons to consider a refinance.
Common Reasons to Refinance a Mortgage
• Your credit score has improved (or rates have declined), and you can qualify for a lower interest rate than you currently have.
• You want to change your repayment terms, either for lower monthly payments (which may mean a longer term) or for a faster loan payoff.
• You want to cash out some home equity to cover expenses like college or home improvements or to cover some higher-interest debt.
• You want to transition from an adjustable-rate mortgage to a fixed rate (or vice versa).
Think about Idaho refinance rates when considering these options.
How to Get the Best Available Mortgage Refi Interest Rate
To secure the best mortgage refinance rate, these are some key moves to make before you apply for a new loan. Think of this as how to refinance a mortgage in Idaho:
• Take good care of your credit score by paying your bills on time and sidestepping new debt.
• Aim for a debt-to-income (DTI) ratio of 36% or less. (Your DTI ratio is your monthly debts divided by your gross monthly income, multiplied by 100.)
• Think about whether your budget can accommodate the purchase of discount points. Also known as mortgage points, each one will cost about 1% of your principal amount and will reduce your interest rate — how large a reduction will depend on the lender.
• Determine how large a monthly payment you can afford. A shorter loan term, as we’ve noted, may mean a higher monthly payment but will result in less interest paid over the long haul.
While you’re taking the steps above, it also pays to become familiar with Idaho mortgage rates.
Understand Trends in Idaho Mortgage Interest Rates
Over the past few years, mortgage rates have been on a bit of a rollercoaster. In January 2021, the national average for a 30-year fixed mortgage hit a historic low of 2.65%. By 2023, that number had jumped to 7.79%. Here’s a look at trends in Idaho and nationally.
Historical U.S. Mortgage Interest Rates
If you’re awaiting an interest rate drop, understanding the longer history of U.S. mortgage rates can help you get some perspective on the current landscape. As the graphic below shows, there was a long span of time when rates sat comfortably under 5.00%. In more recent years, they have trended upward.
Historical Interest Rates in Idaho
Idaho’s mortgage refinance rates have generally followed national trends, with rates rising and falling in line with changes in the broader interest rate environment. It’s worth noting that it would be unusual for the average rate in Idaho to fall by more than a percentage point year to year.
Year
Idaho Rate
National Rate
2000
7.77
8.14
2001
6.93
7.03
2002
6.53
6.62
2003
5.66
5.83
2004
5.63
5.95
2005
5.86
6.00
2006
6.49
6.60
2007
6.43
6.44
2008
5.99
6.09
2009
5.00
5.06
2010
4.79
4.84
2011
4.67
4.66
2012
3.73
3.74
2013
3.83
3.92
2014
4.19
4.24
2015
3.91
3.91
2016
3.72
3.72
2017
4.08
4.03
2018
4.62
4.57
Source: Federal House Finance Agency
Choose the Right Mortgage Refi Type
Interest rates vary depending on the type of mortgage refi you’re considering. Here are a few of the more popular options:
Conventional Refi
Conventional refinance loans, also known as rate-and-term refinances, often have higher interest rates than government-backed FHA and VA loans. But conventional loans are a good option for homeowners who want to lower their interest rate or change their loan term. To be eligible for a conventional refinance, you will need a minimum credit score and adequate equity in your home. Two common types are the 15-year refinance and the adjustable-rate refinance.
15-Year Mortgage Refi
It can be a smart move to refinance into a 15-year mortgage. Yes, it means higher monthly payments, but you stand to save substantial interest over the life of the loan. If you owed $350,000 on your mortgage and refinanced into a 15-year loan at 6.50%, your monthly payment would be $3,049 and you would pay a total of $198,798 in interest. Choosing a 30-year term would lower the monthly payment to $2,212 but increase the interest paid to $446,406.
Adjustable-Rate Mortgage Refi
Adjustable-rate mortgages (ARMs) start with a lower interest rate than fixed-rate loans, making them appealing for homeowners who plan to move before the rate adjusts. If you currently have a 30-year fixed-rate mortgage but anticipate leaving your home within a few years, switching to an ARM could lower your monthly payments. However, it’s important to understand the potential for rate increases in the future. (Some people, on the other hand, refinance out of an ARM and into a fixed-rate loan because they think rates will rise in the future and they want a predictable monthly payment.)
Cash-Out Refi
A cash-out refinance is a smart way to make your home’s equity work for you. Imagine your home is valued at $500,000 and you still owe $300,000 on your mortgage. That leaves you with $200,000 in equity. A lender might allow you to borrow up to 80% of that equity in a cash-out refi. You can use the extra cash for any purpose. It’s a popular solution for debt consolidation and renovations. While the rates for cash-out refis can be a bit higher, the financial flexibility they provide can be well worth it.
FHA Refi
An FHA loan refinance, insured by the Federal Housing Administration, often comes with an attractive low interest rate. If you already have an FHA loan, you can opt for an FHA Simple Refinance or an FHA Streamline Refinance, which simplifies the process. For those without an FHA loan, options include an FHA cash-out refinance or an FHA 203(k) refinance (the latter is designed for home renovations).
VA Refi
A VA loan refinance, backed by the U.S. Department of Veterans Affairs, offers some of the lowest interest rates available. The VA Interest Rate Reduction Refinance Loan (IRRRL) can help you secure a lower interest rate or move from an adjustable-rate mortgage to a fixed-rate one. VA refinance rates offer significant savings and financial flexibility for those who qualify.
Compare Mortgage Refi Interest Rates
Snagging a competitive mortgage rate can save you thousands of dollars on mortgage refinancing costs. Here are some tips:
• Shop around and compare current mortgage refinance rates in Idaho to find the best deal.
• When you’re comparing offers, look at the annual percentage rate (APR) to get a full picture of the costs, including fees and mortgage points.
• Think about the trade-off between rate and fees; lower rates often come with higher costs. Some lenders offer a no-closing-cost refinance but may have higher interest rates instead.
An online refinance calculator will be a valuable tool during this process.
Use an Online Refinance Calculator
Online refinance calculators are a great way to get a rough estimate of what your new monthly payments and potential savings could be. You can put in different interest rates and loan terms to see how different offers compare. Here are a few of our favorite calculators.
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 powerful way to manage debt and improve your financial situation. Whether you want to lower your interest rate, shorten your loan term, or tap into your home’s equity, it’s important to understand the different refinance options available. By getting your financial house in order and shopping around for the best mortgage refinance rates in Idaho, you can make a smart decision that helps you reach your financial goals.
SoFi can help you save money when you refinance your mortgage. Plus, we make sure the process is as stress-free and transparent as possible. SoFi offers competitive fixed rates on a traditional mortgage refinance or cash-out refinance.
A mortgage refinance could be a game changer for your finances.
It’s a savvy financial play to refinance if you can snag a lower interest rate, consolidate debts, or pay off your loan faster. The key is to figure out at what point the money you spend on refinancing in the form of closing costs, discount points, and other fees is outweighed by the money 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 rate?
You can have a conversation with your lender and ask for a lower interest rate on your existing mortgage loan. If you’ve been diligent about making your payments on time, and your credit score is in good standing, your lender might just be open to the idea. But it’s also possible that the lender will instead suggest a refinance or a mortgage recast (which involves paying down a portion of the principal and then recomputing future payments).
How much are closing costs on a refinance?
On average, closing costs typically range from 2% to 5% of the loan amount. So for a $350,000 refinance, you might be looking at $7,000 to $17,500. The final figure can vary based on a few things, like where your property is located, the type of loan you’re getting, and your lender. Keep in mind that these costs can significantly impact the overall price of your loan.
How many times can you refinance your home loan?
There are no limits on how many times you can refinance your home. However, each time you do, you will have to pay closing costs and your credit score could be affected. And even the smoothest refinance takes time and energy. So it’s important to think about the pros and cons before you refinance to ensure that it makes sense for your financial situation.
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.
‡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.
• Mortgage refinancing can be a smart move to save money by lowering your interest rate or changing your loan term, but it’s important to consider the costs and benefits.
• Mortgage refinance rates in Hawaii are influenced by economic factors like Federal Reserve policy and inflation, but your finances (such as your credit score) matter, too.
• Even a 1% drop in the rate for a $300,000 mortgage could mean roughly $170 more in your pocket each month.
• Hawaii refinance rates can differ by loan type, with FHA and VA loans often offering lower rates compared to conventional loans, making them attractive options for eligible borrowers.
• Ever thought about switching to a 15-year mortgage? It could be a smart move, as it often means paying less interest over time, even if your monthly payments go up.
• Remember, refinancing is a financial strategy that should be approached thoughtfully. Consider the costs vs. the potential savings, and explore alternatives such as a HELOC if it fits your needs.
Introduction to Mortgage Refinance Rates
Mortgage refinancing is like hitting the reset button on your home loan. You’re swapping your current mortgage for a new one, and if you play your cards right, you could snag a better deal — think lower monthly payments or a more favorable interest rate.
This guide is your ticket to understanding how refi rates are determined and how to score the best one out there. Whether you’re in Hawaii or any other state, getting a handle on what’s driving the current mortgage rates will put you in the driver’s seat.
💡 Quick Tip: Wondering how to refinance a mortgage? The process, which takes about 30 to 45 days, is similar to when you got your original home loan.
Where Do Mortgage Refi Interest Rates Come From?
Mortgage refinance interest rates are a product of both the economic landscape and your unique financial standing.
Economic factors like Federal Reserve policies, inflation, the bond market, and housing inventory all play a part in the cost of home loans. For instance, high inflation and federal funds rate hikes usually translate to higher mortgage rates. On the flip side, low inflation and a robust bond market can work in your favor. By keeping an eye on these moving parts, you can better predict when the time is right for your refinance. Understanding the local climate for mortgage refinance rates in Hawaii is key to making a savvy move.
Also know that your own personal financial profile will impact your access to refinancing options. Those with higher scores will likely qualify for more favorable interest rates, while those with lower scores will appear less creditworthy to lenders and therefore typically be assessed loftier rates.
Get matched with a local
real estate agent and earn up to
$9,500‡ cash back when you close.
Pair up with a local real estate agent through HomeStory and unlock up to $9,500 cash back at closing.‡ Average cash back received is $1,700.
Interest rates play a significant role in the affordability of your refinance payment. Here’s a closer look: The amount you owe, the time to repay (aka the term of your loan), and the interest rate all come together to determine your monthly payment.
For instance, with a $200,000 loan, a 6.00% interest rate, and a 30-year term, you’re looking at $1,199 a month. But bump that interest rate to 8.00%, and suddenly, you’re paying $1,467 monthly. Over the life of the loan, a lower interest rate could save you close to $100,000. Even a small difference in Hawaii refinance rates can lead to substantial savings.
Also, on the topic on interest rates, it’s smart to focus on the annual percentage rate (APR), because that reflects what you actually pay, including additional fees and charges, to borrow money. The APR can give you a more accurate picture of what you will be spending every month and over the life of the loan.
Why Refinance in Hawaii?
Homeowners refinance for a variety of reasons, each influencing the type of refinance and the interest rate. Here’s a closer look at some specifics, but first, a note. In terms of how soon you can refinance, you can’t necessarily swap out your home loan right away if rates drop. You should have at least 20% equity in your home, especially if you plan to cash out some equity.
Common Reasons to Refinance a Mortgage
Homeowners refinance mortgages for key reasons:
• Lower rates can mean reduced monthly payments and less interest.
• Adjusting your repayment term can help you better manage payments or pay off your loan sooner.
• Refinancing can be a path to accessing home equity for large expenses.
• Switching from an adjustable to a fixed rate may provide financial peace of mind.
💡 Quick Tip: Some lenders offer a so-called no-closing-cost refinance. However, that usually means either rolling the closing costs into the new mortgage principal or exchanging them for a higher interest rate.
How to Get the Best Available Mortgage Refi Interest Rate
If refinancing seems like a wise move, follow this advice to secure the best mortgage refinance rate:
• Build your credit score by paying bills promptly (this is the single biggest factor in determining your score) and sidestepping new debt to keep your credit utilization ratio down.
• Keep your debt-to-income ratio under 36%.
• Compare rates and fees from multiple lenders, including your current financial institution if they offer home loans. You might get a favorable rate since you’re already a client.
• Think about buying discount points (often called mortgage points) to lower your interest rate. Although that means putting down more cash upfront, it can lower your monthly payment and the total overall interest you pay.
• Choose the shortest refi term you can manage to minimize the amount of interest you pay over the life of the loan.
These steps can help you optimize your financial strategy and take advantage of the best Hawaii refinance rates available. Worth noting: While the interest rate is important, make sure you stay tuned into the other fees and costs associated with refinancing. Just as with a primary home loan, mortgage refinancing costs usually involve closing costs to the tune of 2% to 6% of the loan amount.
Understand Trends in Hawaii Mortgage Interest Rates
National mortgage rates have been on a bit of a rollercoaster in recent years, as you will learn about in a moment. The rates in Hawaii tend to mirror these fluctuations. What often makes Hawaii a special case in terms of mortgages isn’t the interest rate on loans, but the fact that Hawaii ranks as one of the most expensive states in the U.S. in terms of property values, with a current median of approximately $947,000. Such elevated prices can push many borrowers into the realm of jumbo loans.
That said, if you’re a homeowner in Hawaii, interest rate trends are something to keep in mind if you’re considering refinancing. Here’s some more detailed intel to consider.
Historical U.S. Mortgage Interest Rates
Mortgage interest rates have seen their share of ups and downs, mirroring the ebb and flow of the economy. In 2021, the average 30-year fixed rate was a modest 3.15%. Fast forward to 2023, and we saw a significant jump to 7.00%. Federal Reserve actions, inflation, and the bond market all play a part in these changes. Moving into early 2025, it’s looking like rates will remain higher for longer, though many had hoped the Fed might cut rates by now.
Below is a graph that gives you an overview of how mortgage rates have varied over the last few decades. By familiarizing yourself with these past trends, you may be better equipped to understand these fluctuations, make decisions about your mortgage, and potentially save money by refinancing when rates are low.
Historical Interest Rates in Hawaii
Hawaii refinance rates tend to follow the national trends, but there can be some differences. Here is a chart summarizing almost two decades’ worth of rates, both in Hawaii and in the U.S. overall, for mortgages. This can provide a closer look at how Hawaii rates typically track; as you’ll see, they are usually slightly lower than the national numbers. (Note that the Federal Housing Finance Agency stopped tracking these numbers in 2018, so the chart ends with that year.)
Year
Hawaii Rate
National Rate
2000
7.59
8.14
2001
6.81
7.03
2002
6.44
6.62
2003
5.43
5.83
2004
5.40
5.95
2005
5.73
6.00
2006
6.15
6.60
2007
6.01
6.44
2008
5.73
6.09
2009
4.79
5.06
2010
4.83
4.84
2011
4.58
4.66
2012
3.68
3.74
2013
3.80
3.92
2014
4.16
4.24
2015
3.88
3.91
2016
3.73
3.72
2017
3.99
4.03
2018
4.48
4.57
Source: Federal House Finance Agency
Choose the Right Mortgage Refi Type
Next, review the mortgage refinance types that may be available to you. Which one is right for you? That will depend on your financial situation and goals. Do you need to lower your monthly bills ASAP, or is your goal to free up some cash from your home equity, or perhaps shorten your loan term? The answer can play an important role in your choice.
Conventional Refi
A conventional refinance, also known as a rate-and-term refi, involves changing the interest rate or loan term of your mortgage. Conventional refis typically come with higher rates than government-backed loans (FHA, VA, USDA), though those loans have specific qualification requirements.
Conventional refinance loans can be suitable for homeowners who want to lower their interest rate or change their repayment term. To get approved, you generally need a minimum credit score (often 620 or higher), sufficient home equity (typically 20%), and a manageable debt-to-income ratio.
Cash-Out Refi
Cash-out refinances offer a way to tap into your home’s equity and get a new mortgage for more than you currently owe. You can then take the difference in cash. Cash-out refis typically have higher interest rates than traditional refis, but they can be a smart way to get a large sum of money for things like home renovations or paying off high-interest debt. For example, if you have a $500,000 home and a $300,000 mortgage, you have $200,000 in equity, and can typically access up to 80% of that amount.
15-Year Mortgage Refi
Switching from a 30-year to a 15-year mortgage by refinancing could help you pay off your debt that much sooner and save big on interest. Sure, the monthly payments are higher, but the long-term savings are impressive.
Here’s an example:
• A 30-year, $1 million loan at 7.50% APR results in a monthly payment of about $6,992 and a total interest of $1,517,167.
• If you refinanced to a 15-year term at 7.00%, your monthly payment jumps to around $8,988. But the total interest paid plummets to approximately $617,891, saving you nearly $900,000.
When you’re weighing your options for mortgage refinance rates in Hawaii, consider the substantial benefits a 15-year refi can bring.
Adjustable-Rate Mortgage Refi
An adjustable-rate mortgage (ARM) can start with a lower interest rate than a fixed-rate loan, but it’s essential to consider that the rate may increase over time based on market conditions. If you’re planning to move before the rate adjusts, an ARM could be a smart financial move. For example, if you have a 30-year fixed-rate mortgage but anticipate leaving your home within a few years, an ARM could lower your monthly payments and save you money in the short term.
One note of caution: When considering an ARM refi, it’s important to monitor mortgage refinance rates in Hawaii and assess your future plans. You want to make sure that, if you wind up not moving when anticipated, you can afford the higher payments that might be due.
FHA Refi
FHA loans, backed by the Federal Housing Administration, are often associated with lower interest rates, sometimes a full percentage point less than conventional loans. Some FHA refinance options are tailored exclusively for existing FHA loan holders, such as the FHA Simple and Streamline Refinances.
However, alternatives like the FHA cash-out refinance or the FHA 203(k) refinance are designed for home improvements and are available to those without an FHA loan. These options can still provide you with competitive mortgage refinance rates in Hawaii and the flexibility to manage your home equity.
VA Refi
VA loans, backed by the U.S. Department of Veterans Affairs, are known for their low interest rates. To qualify for a VA refinance, technically called an interest rate reduction refinance loan (IRRRL), you must already have a VA loan. (These are available to past and present members of the military, as well as some spouses.) This type of refinance can help you secure a lower rate and reduce your monthly payments, making it a valuable option for veterans and eligible borrowers.
Compare Mortgage Refi Interest Rates
To snag the best possible mortgage refinance rate for your situation, follow this advice:
• Compare offers from multiple lenders. It can be smart to get at least a few and see how rates and terms stack up.
• Look at the annual percentage rate (APR), which encompasses interest rates, fees, and discount points.
• Evaluate the total costs, including closing costs and fees. Really zero in on how much you will need upfront and then how much you will be paying every month.
• If possible, build your credit score which can allow you to qualify for more favorable rates and terms.
• Stay informed about market trends to time your refinance effectively. Plenty of websites offer regularly updated numbers.
• Ensure your refinance aligns with your financial goals, whether it’s lowering your rate, changing your term, or accessing equity. Hawaii refinance rates should be a key factor in your decision, but pick the refi loan that will get you where you want to go in terms of, say, raising cash to start a business or lowering your monthlies so you can afford your new baby’s daycare costs.
Use an Online Refinance Calculator
Online refinance calculators can be a fantastic resource for getting a ballpark figure of what your new monthly payments might look like and for comparing different refinance options. These calculators take into account your current loan balance, the new interest rate, and the term of the loan. By inputting your specific details, you can get a clear picture of your potential savings and the impact of refinancing. For example, you can use a refinance calculator to see how much you could save by refinancing at the current mortgage refinance rates in Hawaii. Using these tools can help make the decision-making process easier and more informed.
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 in Hawaii could be a smart financial move that saves you money or helps you achieve other financial goals. By refinancing, you might be able to snag a lower interest rate, reduce your monthly payment, pay off your loan sooner, or tap into your home equity. But refinancing isn’t free — you’ll need to pay closing costs, and keep an eye on those all-important interest rates to gauge how much you’ll be paying. It’s usually smart to compare offers from a few lenders to find the right fit.
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.
Yes, you can lower your interest rate without refinancing by recasting your mortgage. This means you pay a lump sum toward your loan principal, and your lender recalculates and lowers your payments. Another option: If you’re facing financial hardship, you can request a loan modification to change your rate and avoid foreclosure.
Is there a cost to recast your mortgage?
When considering a mortgage recast, it’s smart to factor in any associated fees, although they are typically much more modest compared to refinance fees. Lenders usually charge a fee ranging from $150 to $500 for a mortgage recast, but the exact amount may vary, compared with refi closing costs of 2% to 6% of the loan amount. However, It’s crucial to carefully review the terms and conditions set by the lender before proceeding with a mortgage recast to ensure that it aligns with your financial goals and circumstances.
Can I tap into my home’s equity without refinancing?
Yes, you can pull equity out of your home without refinancing through a home equity loan (for a lump sum against your equity) or a home equity line of credit (HELOC). A HELOC allows you to borrow funds as needed, typically with a variable interest rate, up to a set limit. These sources of funds can help homeowners who want to use the equity in their home for things like home improvements, debt consolidation, or paying for college.
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