Best Affordable Places to Live in Illinois in 2024
Best Affordable Places to Live in Illinois in 2025
(Last Updated – 03/2025)
Illinois is a state full of vibrant cities, productive farmland, and a rich history that has long enticed people from all walks of life. Located in the heart of the Midwest, it’s well known for its cultural attractions, top-notch schools, and strong employment market, particularly in industries like finance, agriculture, and technology.
Residents can enjoy all four seasons, from cozy winters to warm summers. Young professionals and students enjoy the dynamic urban hub of Chicago, while families are drawn to its amusement parks, lakes, and vast recreational regions. Whether you’re a lover of the outdoors, a career-driven person, or someone looking for the ideal balance of both, Illinois offers a value-packed, budget-friendly setting to suit your lifestyle.
Best Places to Live in Illinois
Often known as the “Prairie State,” Illinois has a blend of urban settings and countryside escapes. From the pulsating energy of Chicago to the tranquility of small towns, the state caters to a spectrum of lifestyles. For those looking for a thriving art scene, career opportunities, excellent schools, or a quieter life amidst green pastures, Illinois has something to offer.
Here are some of the best places in Illinois to live, each with their own unique appeal.
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Best Affordable Places to Live in Illinois
When looking at the cost of living by state, compared to other U.S. states, Illinois falls near the middle. It’s number 18 on the list of states ranked by cost of living, with a cost of living that is 102% of the U.S. average.
When examining the factors that contribute to the overall cost of living (COL) in Illinois, such as food prices and transportation costs, we see that housing here is relatively affordable. The state does have the second-highest property taxes in the country, however.
Fortunately, there are plenty of bargains to be had, depending where in the state you choose to live. These are the best affordable places to live in Illinois.
1. Decatur
Photo credit: iStock/Westhoff
Often praised for its low cost of living, Decatur is home to beautiful parks and recreational areas. It hosts a lively array of festivals and events, including the largest free street festival in the Midwest. It has a great public transportation system and educational opportunities at Millikin University. Those working in manufacturing and transportation will find ample job opportunities in the area. Potential buyers may want to help their home shopping chances by learning some tips to qualify for a mortgage.
Population: 68,670
Median Household Income: $50,809
Cost of Living: 87% of U.S. average
Average Rent Price: $920
Home Price-to-Income Ratio: 1.9
2. Rockford
Photo credit: iStock/DenisTangneyJr
Located near the Wisconsin border, Rockford is known for its thriving arts scene, including the Rockford Art Museum and the Coronado Performing Arts Center. Residents can also enjoy the peaceful Anderson Japanese Gardens. The city has a variety of job opportunities with a focus on health care and academia, and the public transportation system makes commuting easy. Housing in Rockford is affordable. When evaluated against similar cities in Illinois, Rockford emerges as an affordable choice for many. A particularly telling metric is its home price-to-income ratio of 2.9, suggesting high housing affordability in Rockford.
Population: 146,120
Median Household Income: $53,328
Cost of Living: 86% of U.S. average
Average Rent Price: $1,150
Home Price-to-Income Ratio: 2.9
3. Peoria
Photo credit: iStock/ghornephoto
Nestled along the Illinois River, Peoria has a strong community feel, great schools, and a thriving cultural scene with numerous music and cultural festivals throughout the year. Residents enjoy the Peoria Riverfront for leisure activities, and the city is home to Bradley University, providing educational and job opportunities. Peoria can be a good deal for many residents, especially first-time homebuyers, looking to buy or rent.
Population: 110,460
Median Household Income: $58,716
Cost of Living: 87% of U.S. average
Average Rent Price: $1,115
Home Price-to-Income Ratio: 2.1
Best Places to Live in Illinois for Families
Illinois is a family-friendly state, with plenty of towns, cities, and suburbs that have good schools, welcoming neighborhoods, and lots of recreational opportunities. These are some of the best places to live in Illinois for families.
1. Park Ridge
Photo credit: Flickr/Teemu008 , Creative Commons Attribution-ShareAlike 2.0
A suburb of Chicago, Park Ridge offers families a tight-knit community feel. It has many parks and activities. Parents will appreciate that it has a reputation for top-tier schools. Commuting to downtown Chicago is easy using the Metra train. Potential buyers may want to explore different types of mortgage loans to see what their best options are for buying in Park Ridge.
Population: 37,897
Median Household Income: $138,059
Cost of Living: 112% of U.S. average
Average Rent Price: $2,100
Home Price-to-Income Ratio: 3.7
2. Long Grove
Photo credit: iStock/benkrut
Known for its historic charm and natural beauty, Long Grove offers serene landscapes. Families are drawn here by its strong school system. The annual Chocolate, Strawberry, and Apple Festivals make it fun for families as well. Although the average rent price here is high, one- and two-bedroom apartments priced at under $2,000 per month are relatively plentiful, suggesting the average may be driven by the rental price of larger properties. Buying a home? Going through the mortgage preapproval process might help give you an edge when you’re bidding on a house here. This is also a market where some buyers may need a jumbo mortgage loan.
Population: 8,263
Median Household Income: $235,368
Cost of Living: 111% of U.S. average
Average Rent Price: $4,950
Home Price-to-Income Ratio: 3.7
3. Libertyville
Photo credit: Flickr/Richie Diesterheft , Creative Commons Attribution-NoDerivs 2.0
Libertyville offers a balance of suburban charm and urban conveniences. It has exceptional schools and family-centric recreational areas such as Independence Grove. Newcomers will quickly feel at home since there is a large percentage of family households. MainStreet Libertyville events are a fun draw for parents and kids.
Population: 20,332
Median Household Income: $162,270
Cost of Living: 107% of U.S. average
Average Rent Price: $3,000
Home Price-to-Income Ratio: 3.5
Recommended: First-time Homebuyer Programs in Illinois
Best Places to Live in Illinois for Young Adults
For young adults, these are the best places in Illinois to live for affordability, job opportunities, activities, and social life.
1. Naperville
Photo credit: iStock/DenisTangneyJr
Located in the suburbs but with an urban feel, Naperville has both high median salaries for recent grads and a vibrant cultural scene. A substantial percentage of residents are between 20 and 34, and the city is just 35 miles from Chicago and located along a commuter rail line with express service during morning and evening commutes. The city manages to blend both desirability and relative affordability within the broader Illinois housing landscape.
Population: 150,245
Median Household Income: $150,937
Cost of Living: 107% of U.S. average
Average Rent Price: $2,595
Home Price-to-Income Ratio: 3.8
2. Peoria
Photo credit: iStock/ghornephoto
This city on the Illinois River combines culture with affordability, making it appealing to young adults. The home of Bradley University, it has a strong local economy with jobs in health care, education, and manufacturing. Various venues for events and entertainment help to create a vibrant social scene. If you’re trying to qualify for a mortgage in Peoria, or anyplace, and you have questions, a call to a home loan help center could give you the info you need.
Population: 110,460
Median Household Income: $58,716
Cost of Living: 87% of U.S. average
Average Rent Price: $1,115
Home Price-to-Income Ratio: 2.1
3. Springfield
Photo credit: iStock/4nadia
As the state capital, Springfield offers both history and myriad job opportunities in education, health care, and government sectors. The city’s culture includes museums, theaters, and many events throughout the year. University of Illinois Springfield caters to students and provides additional jobs.
Population: 112,544
Median Household Income: $65,537
Cost of Living: 89% of U.S. average
Average Rent Price: $1,100
Home Price-to-Income Ratio: 2.4
Recommended: Mortgage Prequalification vs Preapproval
Best Places to Live in Illinois for Retirees
For older adults looking for a desirable place to live that fits their budget, Illinois has many options, from cities to small towns.
1. Rockford
Photo credit: iStock/benkrut
Known for its affordability, Rockford offers reasonably priced housing options, making it attractive to retirees on a budget. In Illinois, Social Security income isn’t taxed, adding to the financial appeal. The city provides various programs and assistance for seniors, and with attractions like the Anderson Japanese Gardens and the Coronado Theatre, entertainment and recreational activities are in abundance.
Population: 146,120
Median Household Income: $53,328
Cost of Living: 86% of U.S. average
Average Rent Price: $1,150
Home Price-to-Income Ratio: 2.9
2. Danville
Photo credit: Flickr/Randy von Liski , Creative Commons Attribution-NonCommercial-NoDerivs 2.0
Danville’s housing market is one of the most affordable in the state. This affordability, combined with the state’s policy of not taxing Social Security or retirement income, presents an appealing financial landscape for retirees. This small quiet city has a museum and art galleries, and its location along the Vermilion River makes it great for outdoor enthusiasts. There are plenty of state parks and nature preserves here. The town offers assistance programs for older residents, and its cultural spots like the Fischer Theatre make for great recreational activities.
Population: 28,206
Median Household Income: $44,239
Cost of Living: 80% of U.S. average
Average Rent Price: $750
Home Price-to-Income Ratio: 1.6
3. Riverwoods
This village in the Chicago metropolitan area offers a mix of housing options, with some upscale residences reflected in the area’s higher average rent. Retirees can find one- and two-bedroom rentals in the $1,800-$2,300 per month range. And the serene wooded environment and proximity to urban amenities are welcoming. Entertainment and recreation are readily accessible, with shopping and dining options in nearby Deerfield, and various nature trails and parks in Riverwoods itself.
Population: 3,988
Median Household Income: $243,036
Cost of Living: 111% of U.S. average
Average Rent Price: $4,750
Home Price-to-Income Ratio: 3.7
💡 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).
Best Places to Live in Illinois Near the Water
If you long to live by a lake, Illinois has plenty of inviting options.
1. Zion
Located further north along the coast of Lake Michigan, Zion has relatively reasonable housing options. The city has a growing cultural scene marked by events and festivals, especially in the summer. With taxes in line with state averages, the draw to Zion is enhanced by its serene beaches, the Illinois Beach State Park, and various recreational opportunities that appeal to both residents and visitors. Residents here are getting decent value in housing for their earnings, making Zion a competitive choice for many home seekers in the state.
Population: 24,206
Median Household Income: $62,574
Cost of Living: 100% of U.S. average
Average Rent Price: $1,295
Home Price-to-Income Ratio: 3.5
2. Evanston
Photo credit: iStock/FierceAbin
Evanston combines urban energy with lakeside tranquility, and offers both high-end homes and more modest options. Northwestern University enriches the city’s cultural scene, hosting numerous events and arts programs. The appeal of Evanston beaches, combined with entertainment hubs like the Evanston Arts Center and the vibrant downtown, makes it an attractive waterside city. Although its cost of living is on the higher side for the state, it is one of the less expensive lakeside spots to purchase a home.
Population: 75,070
Median Household Income: $95,766
Cost of Living: 136% of U.S. average
Average Rent Price: $2,284
Home Price-to-Income Ratio: 4.5
3. Lake Forest
Photo credit: iStock/George Dodd
As its name implies, Lake Forest offers a lush environment combined with the elegance of Lake Michigan’s coastline. The city’s housing is on the pricier side, reflecting its upscale amenities and prestigious schools. The cultural scene is enriched by institutions like the Lake Forest Symphony. The blend of beaches, recreational parks, and a rich cultural calendar makes Lake Forest a coveted location for those seeking waterside living.
Population: 19,354
Median Household Income: $228,120
Cost of Living: 128% of U.S. average
Average Rent Price: $4,655
Home Price-to-Income Ratio: 4.8
The Takeaway
The state of Illinois offers a multitude of great living options to suit various tastes and budgets. From bustling urban hubs to serene suburban retreats, Illinois promises a home for everyone. With each city boasting its unique charm, the Prairie State truly stands out as one of best places to live in the country for families, young adults, and retirees.
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FAQ
What city in Illinois has the lowest cost of living?
Of all the cities on our list, Danville has the lowest cost of living in Illinois, with a cost of living that is 80% of the U.S. average.
Where is the cheapest place to buy a house in Illinois?
One of the cheapest places to buy a house in Illinois is Danville, which has one of the most affordable housing markets in the state of Illinois. Danville also has a low cost of living overall.
What is the best town to live in Illinois?
Illinois has many great cities in which to live, depending on what you’re looking for. Naperville is nice for young adults, retirees will appreciate the affordability of Rockford, and Park Ridge is great for families.
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Current Mortgage Refinance Rates in Colorado Today
COLORADO MORTGAGE REFINANCE RATES TODAY
Current mortgage refinance rates in
Colorado.
Apply online or call for a complimentary mortgage consultation.
Compare mortgage refinance rates in Colorado.
Key Points
• Mortgage refinancing can cut your monthly payments or save you money on interest in the long run, especially if the current rates are in your favor.
• Colorado refinance rates are influenced by a variety of economic factors, like the 10-year Treasure Note and housing inventory.
• Opting for a 15-year mortgage can be a smart financial move, as it often means paying less interest overall, even if the monthly payments are higher.
• Adjustable-rate mortgages (ARMs) can offer lower initial rates, making them a good choice if you plan to move before the rate adjusts, potentially providing short-term financial relief.
• A cash-out refinance allows you to tap into your home’s equity for big projects or to consolidate high-interest debt.
• By keeping an eye on Colorado refinance rates and weighing offers from multiple lenders, you’re in a good position to snag the best available deal, potentially saving a bundle over the loan’s lifetime.
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 Colorado or somewhere else, being in the know about the factors at play will help you make a savvy choice.
💡 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?
Mortgage refinance interest rates are influenced by economic factors and your individual financial profile. The bond market, particularly the performance of the 10-year U.S. Treasury Note, plays an important role in setting current mortgage rates. When the yield on the Treasury Note increases, mortgage interest rates tend to rise as well.
Housing market inventory is also significant. If the market slows down and there are more homes available than buyers, lenders might lower their rates to attract more customers. The overall economic environment is another important factor. A robust job market and economic growth can push interest rates higher, while a recession typically results in lower rates.
On a personal level, a strong credit score and a low debt-to-income ratio can help you secure the best possible rate.
How Interest Rates Affect Home Affordability
Interest rates are a big deal because they help determine your monthly refinance payment. (Of course, your payment is also influenced by your loan amount and the term over which you’re repaying it.) Here’s an example of how much your interest rate impacts your payment:
A $200,000 loan with a 6.00% interest rate and a 30-year term would translate to a monthly payment of $1,199. But if that interest rate jumps to 8.00%, the monthly payment would increase to $1,467. Over the life of the loan, that’s nearly $100,000 in savings with the lower interest rate. Even a small change in the interest rate can make a big difference in your savings over time, and the affordability of your home loan.
Why Refinance in Colorado?
Refinancing your mortgage can offer several benefits, depending on your financial goals. If current interest rates are lower than your existing mortgage, refinancing can reduce your monthly payments and save you money over the life of the loan. Refinancing can also help you switch from an adjustable-rate mortgage to a fixed-rate loan, providing stability and predictability in your monthly payments.
Whatever your reason, you should have at least 20% equity in your home before refinancing, especially if you plan to cash out some equity.
Common Reasons to Refinance a Mortgage
Here are some common reasons homeowners refinance their mortgage:
• You qualify for a lower interest rate due to improved credit or market conditions.
• You’re considering adjusting your repayment term to manage monthly payments or pay off the loan more swiftly.
• You want to tap into your home equity to fund significant expenses, like education or home improvements.
• Your adjustable-rate mortgage is about to reset, and you want to switch to a fixed-rate loan.
• You have an FHA loan and 20% equity, and you’re looking to bid farewell to mortgage insurance.
• You’re considering debt consolidation or releasing a cosigner.
Recommended: How Soon Can You Refinance a Mortgage?
How to Get the Best Available Mortgage Refi Interest Rate
As mentioned above, your financial history has an impact on the interest rates that lenders offer you. Homeowners with strong credit and a low debt-to-income ratio may secure much lower rates than average.
To secure a competitive mortgage refinance rate, here’s your To Do list:
• Pay your bills on time, and steer clear of new debt to bolster your credit score.
• Maintain a debt-to-income ratio under 36%.
• Compare offers from multiple lenders.
• Think about buying mortgage points to lower your interest rate.
• If you can swing it, go for a shorter mortgage term. Just remember that a shorter term means higher monthly payments.
Once you’ve achieved an optimal credit history, it’s time for a deep dive into interest rate trends.
Understand Trends in Colorado Mortgage Interest Rates
The rise and fall of mortgage rates in Colorado have put on quite a show in recent years. We saw the average 30-year fixed mortgage rate at or below 3.00% in 2021, but that number rose to approximately 7.00% in 2023. If you were hoping for a rate decrease this year, early 2025 predictions indicate that rates are likely to hold steady. By keeping an eye on interest rates, you can start to understand certain patterns.
Historical U.S. Mortgage Interest Rates
In the chart below, you’ll see that rates were around 6.00% in the early 2000s. They dropped to under 3.00% in 2020 — and cemented the idea that low rates were “normal.” In 2023, they rose again to around 7.00%. While many people today complain about high interest rates, current mortgage refinance rates are below the 50-year average. Understanding the factors that influence rates can help you anticipate rate movements and make more informed decisions about when to refinance.
Historical Interest Rates in Colorado
The state of Colorado has seen a lot of movement in mortgage refinance rates over the years, following the national trends. Below, you can compare Colorado and U.S. rates from 2000 to 2018 — they’re similar but not identical. (The Federal Housing Finance Agency stopped compiling state averages after 2018.)
| Year | Colorado Rate | National Rate |
|---|---|---|
| 2000 | 7.81 | 8.14 |
| 2001 | 6.91 | 7.03 |
| 2002 | 6.28 | 6.62 |
| 2003 | 5.54 | 5.83 |
| 2004 | 5.56 | 5.95 |
| 2005 | 5.74 | 6.00 |
| 2006 | 6.52 | 6.60 |
| 2007 | 6.40 | 6.44 |
| 2008 | 6.00 | 6.09 |
| 2009 | 5.06 | 5.06 |
| 2010 | 4.88 | 4.84 |
| 2011 | 4.67 | 4.66 |
| 2012 | 3.67 | 3.74 |
| 2013 | 3.87 | 3.92 |
| 2014 | 4.13 | 4.24 |
| 2015 | 3.89 | 3.91 |
| 2016 | 3.65 | 3.72 |
| 2017 | 3.97 | 4.03 |
| 2018 | 4.56 | 4.57 |
💡 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.
Choose the Right Mortgage Refi Type
The type of mortgage refinance you choose influences the interest rate you’ll be offered. Some refi types trend higher or lower. Keep this in mind when you’re considering refinancing options.
Conventional Refi
A conventional refinance, also known as a rate-and-term refinance, is a popular choice for homeowners seeking to enhance their mortgage terms. While these refis often carry higher rates than government-backed loans such as FHA, VA, or USDA, they provide increased flexibility and the potential to waive private mortgage insurance if you have at least 20% equity in your home. This type of refinance is an excellent option for those aiming to reduce their interest rate or adjust their loan term.
Cash-Out Refi
Cash-out refinances are a popular way to leverage home equity, putting a lump sum in your hands for a range of financial needs, from home improvements to consolidating high-interest debt. Here’s an example: If your home is worth $500,000 and your current mortgage balance is $300,000, you have $200,000 in equity. A lender may allow you to borrow up to 80% of your equity, which would leave you with $100,000 after paying off your existing mortgage. This can be a savvy way to tackle debt or finance big-ticket items.
FHA Refi
FHA loans, insured by the Federal Housing Administration, often come with lower interest rates, making them attractive for refinancing. If you already have an FHA loan, you can opt for an FHA Simple Refinance or an FHA Streamline Refinance to potentially lower your rate. For those without an FHA loan, options include an FHA cash-out refinance or an FHA 203(k) refinance, which is designed for home renovations and repairs. These alternatives can provide financial flexibility and 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. 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 be especially beneficial, potentially lowering your monthly payments and removing the need for private mortgage insurance. This can be a highly cost-effective option for eligible veterans and their families.
15-Year Mortgage Refi
Now, let’s talk about the 15-year mortgage refinance. This option can be a game-changer, cutting down the total interest you’ll pay over the loan’s life, even though your monthly payments will be higher. For instance, on a 30-year, $1 million loan at a 7.50% rate, you’d be looking at a monthly payment of around $6,992 and a whopping $1,517,167 in total interest. But refinance to a 15-year term at a 7.00% rate, and you’d 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 terms save you money in two ways: by reducing the amount of time you’re paying interest on the loan, and by offering slightly lower interest rates than longer terms.
Adjustable-Rate Mortgage Refi
Adjustable-rate mortgages (ARMs) start with a lower interest rate than fixed-rate loans, but the rate can change over time. If you’re planning to move before the rate adjusts, an ARM may be the right option for you. In the short term, you can save on your monthly payments and get the financial breathing room to set your sights on your next home.
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.
Online Refinance Calculators
Online refinance calculators are a great way to figure out your new monthly payment or compare different refinance options. They can help you understand the potential savings from refinancing by taking into account your current loan balance, interest rate, and the terms of the new loan. Using a refinance calculator can help you see more clearly and make a more informed decision about whether or not refinancing is right for you.
Run the numbers on your home loan.
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Mortgage calculator
Punch in your home loan amount and a new interest rate, and we’ll estimate your payoff date.
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Down payment calculator
Enter a few details about your home loan and we’ll provide your monthly mortgage payment.
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Home affordability calculator
Provide us with a few details and see how much you can afford to spend on a home purchase.
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
The Takeaway
Refinancing your mortgage can be a smart financial move, potentially saving you money through a lower interest rate, reduced monthly payments, or by tapping into your home equity. But it’s important to consider the costs and benefits and how they align with your long-term financial goals. Whether you’re looking to refinance to a 15-year mortgage, an adjustable-rate mortgage, or a cash-out refinance, understanding your options and getting your financial house in order can help you get the best rate and terms.
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
How much are closing costs on a refinance?
Closing costs on a mortgage refinance typically fall between 2% to 5% of the total loan amount. On a $300,000 refinance, you’re looking at a range of $6,000 to $15,000. The final figure can vary based on location, loan type, and lender. To ensure you’re getting the best deal, take the time to compare closing costs from different lenders. This extra effort could save you hundreds, if not thousands, of dollars.
Will refinancing ding your credit score?
Refinancing can cause a temporary dip in your credit score due to the hard inquiry and the new account on your credit report, but this impact is usually minor and short-lived. If you have a high credit score, the impact of refinancing might be barely noticeable.
Will I have to pay closing costs when I refinance my mortgage?
Yes, you should expect to pay closing costs again when you refinance. Typically, these costs range from 2% to 5% of the loan amount. These costs include a variety of fees associated with processing and closing the refinance transaction, such as appraisal fees, title insurance, lender fees, and other miscellaneous charges. It’s important to consider these costs when you’re thinking about refinancing to make sure the potential savings are greater than the costs.
How many times can you refinance your home loan?
There are no set limits on how many times you can refinance your primary residence. However, each time you refinance, you’ll likely have to pay closing costs and your credit score may be affected. That’s why it’s important to consider the potential benefits and drawbacks of refinancing and weigh your options based on your financial goals and circumstances.
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-Q125-161
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 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.
-
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
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-Q125-156
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 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.
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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
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
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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
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Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
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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
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