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Mortgage Refinance In Portland: How The Math Is Changing In 2020

Mortgage Refinance in Portland: How the Math Is Changing in 2020

Summary: When mortgage rates are low, that presents an opportunity for homeowners to refinance their mortgages to take advantage of lower rates and huge savings. With rates being super low these days, many homeowners have been capitalizing on refinances. In this article, we’ll go through the current refinancing activity market in Portland and across the country and help you determine if now is the right time for you to refinance.

Are you thinking of refinancing your mortgage in the Portland, Oregon area? Wondering if it’s a good time for a refi? Here’s a market update to help you decide.

Related: View current rates for Portland, OR

Mortgage Refinance Update for Portland, Oregon

For months, refinancing activity in Portland has been skyrocketing as mortgage rates have continued to plummet over the past year-and-a-half. As of the week ending April 3, 2020, the mortgage rate for a 30-year fixed-rate mortgage sits at 3.33%, which is near historic lows.

And rates actually hit an all-time low the first week of March, 2020, which really ramped up refinance activity in Portland and across the nation, causing backlogs of refinancing applications among lenders.

But over the past week, refinance activity has slowed somewhat as a result of continued fears over the COVID-19 pandemic. As social distancing measures continue to be in place and the economy taking a hit, mortgage activity has been affected, though applications for both refinancing and new home mortgages continue, albeit at a slower pace.

According to the Mortgage Bankers Association (MBA), refinance applications dipped 19% from the previous week, though it was 144% higher compared to the same week last year and increased 25% the week before. However, refinance activity is expected to go through swings and fluctuations thanks to ongoing volatility in mortgage rates.

Live Portland Mortgage Rates Sep, 26, Sat, 2020

Home Prices Rising Across Portland and the Entire State

Rising home values may also enable more Portland homeowners to refinance their mortgage loans in 2020. While house prices across Portland have remained stagnant over the past couple of years, they are starting to increase again. In April 2020, Zillow reported that the median home price in Portland had dipped by 0.2% over the previous 12 months, though they are expected to increase 2.8% over the next year. Right now, home prices in Portland are averaging $462,300.

In the state of Oregon as a whole, the average home price is currently $369,200. Prices have increased 3.0% over the past 12 months, according to Zillow, and are expected to increase another 3.9% over the next year.

Rising house values give homeowners more equity, which can make it easier to qualify for a refinance loan. This, too, could lead to increased mortgage refinancing in the Portland, Oregon area — especially if we see additional drops in mortgage rates.

Related: Are Portland home prices cooling?

When Does Refinancing Make Sense?

So how do you know if it’s a good time to refinance your home in Portland? When does refinancing work to your advantage, financially speaking? Fortunately, there’s no guesswork involved here. It’s just basic math.

Assuming you want to refinance primarily to reduce your monthly payments, all you have to do is calculate your “break-even” point. This is the point at which your accrued monthly savings (from the new home loan) begin to exceed your upfront closing costs. If you keep the loan beyond that point, it works out to your financial advantage.

To determine your break-even, you’ll need to know the following:

    • How much will you pay in closing costs on the new loan?
    • How much will you save each month after refinancing?

By dividing the cost of the refi by the amount of money saved each month, you can determine how many months it would take to reach your break-even point.

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Let’s Run the Numbers For Refinancing

Could you benefit from refinancing your Portland home in 2020? We can help you decide by evaluating your current loan situation and your financing goals. Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We currently lend in all of Washington, Oregon, Idaho and Colorado and provide qualified borrowers with a variety of mortgage programs to suit their needs. We’d be happy to help you too. Please contact us if you have mortgage-related questions.

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