With Mortgage Rates on the Rise, Is It Time to Refinance?

May 12, 2020
Last updated:
April 6, 2022
In This Article

Mortgage rates have been low for a few years now, giving homebuyers plenty of incentive to get into the market, and homeowners to refinance to realize significant savings over the life of their mortgages. 

That said, mortgage rates are on the rise, and have been over the past year. And they’re expected to continue inching up throughout 2022.

Given these factors, is now the time to refinance

How Will the Fed’s Interest Rate Hikes Impact Mortgage Rates?

During the health crisis, the Federal Reserve sought to make borrowed money less costly by lowering its benchmark interest rate, under which financial institutions lend to each other, effectively to zero percent. While the Fed lowering their Fed Funds Rate to zero doesn’t directly impact mortgage rates, other stimulus the Fed is providing does have a direct impact. This includes the purchasing of Mortgage Backed Securities.

The Fed purchased billions of dollars of Mortgage Backed Securities which helped push mortgage rates to record lows. 

However, during its last meeting, the Fed announced that it would increase interest rates at least three times in 2022. 

Huge government debt, an economy in the midst of a recession and possibly worse, along with minimal inflationary pressures is a perfect combination to keeping long-duration rates low.

Should you refinance now or wait? Timing the market is difficult but if you can save money on interest with little to no closing costs there is little downside to refinancing. If rates continue to drop in the future you can always look to refinance again down the road. 

Real Estate Transactions in the States


Washington State is considered one of the hottest markets in the entire country. Demand is skyrocketing, and the current supply cannot keep up. 

This has helped contribute to soaring home prices over the past year. The current average home price in Washington State is $573,071, marking a whopping 23.2% increase in prices year-over-year.


Like Washington State, Colorado is also seeing a sizzling real estate market. Housing markets across Colorado – especially in places like Denver – are extremely hot right now. The housing inventory just cannot keep up with demand in this state. The market is certainly a very competitive one.

For instance, in Denver, homes are selling in as little as 10 days after being listed. Prices in the city have risen 18.8% over the past year and now sit at $593,289. Buyers are continuing to want to get into the market in centers across Colorado.


The housing market across the state of Oregon is very healthy. This year is still a good time to get into the market, though it may be best to get in sooner rather than later in order to buy before home prices continue to soar. 

As of early 2022, home prices in Oregon are $486,642, which is 19.7% higher than where they were last year at the same time. 


Business observers see no decline in the enthusiasm for refinancing on the part of homeowners. Lenders are fully equipped to originate and approve loans online.

Right now, the average home price in Idaho is $451,830, marking an impressive 33.4% increase year-over-year. Boise, in particular, has contributed to the state’s dramatic rise in home prices. Over the past year, the average home price has increased 30.2% and now sits at $518,939.

Should I Refinance My Home?

With the knowledge that mortgage refinance is relatively safe, both legally and biologically, prospective borrowers must examine their individual circumstances as to whether replacing the current mortgage is a wise decision. Certain financial and legal issues are worthy of consideration.

Employment and Income

Lenders obtain employment verifications to make sure borrowers are financially capable of carrying a mortgage. Borrowers should understand that getting approved for a mortgage requires them to meet stringent criteria, which have been more stringent over recent years.

Rate on Current Loan

As mentioned earlier, mortgage rates are on the rise, though they are still relatively low. Will any potential savings make up for the costs associated with applying for and closing another home loan? How long you stay in your house can help determine when you break even and begin to save.

3 good questions to ask if you presently have a low-rate mortgage:

  1. Will refinancing with a shorter term help me to pay off the loan faster?
  2. Does my equity allow me to take cash out when refinancing?
  3. Will refinancing require me to pay mortgage insurance?

The ideal answers should be yes, yes and no. If so, fire away. One more consideration: now is the time to switch to fixed-rate if your current mortgage is adjustable. Low rates are not a perpetual guarantee.

View Current Mortgage Rates

Credit Scores and Debt

Especially for the temporarily unemployed, good credit becomes all the more important for gaining the confidence of underwriters. If, since the last mortgage closed, a borrower has taken on a larger volume of consumer debt, it may show up in the FICO score and will definitely affect the debt-to-income ratio so important when evaluating applications.

Despite the attractiveness of the new rates, prospects should review their credit report with a loan officer. 

Liens and Judgments

Along the same lines, if a borrower has incurred liens or judgments that are attached to the property since closing on the current mortgage, a lender will condition the refinance on paying those off or, alternatively, getting them discharged.

Depending on the size of these claims, it might make sense to delay refinancing until these matters are settled once and for all. The title company can not issue a clean policy to the lender as long as a lien or judgment stays in place. Furthermore, they may not appear on the credit report, showing up only on the title report.

In deciding whether or not to refinance, potential applicants do well to discuss their situation with a mortgage professional. This expert knows from experience when refinancing makes sense…and when it does not.

Ready to Refinance Your Mortgage?

Sammamish Mortgage has been around since 1992, and we’d love to help you with our expertise. Based in the Pacific Northwest, Sammamish offers high quality mortgage loan programs in Colorado, Oregon, Idaho, and Washington.

To get a rate quote, you can Contact Us. We can help explain the process to you. If you’d rather View Rates on our website, you can. Or, if you are ready to get the process going, you can Apply Instantly or simply get a Rate Quote.

Get an Instant Mortgage Rate Quote Today

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