Mortgage Refinance in Portland: How the Math Is Changing in 2022

May 24, 2017
Last updated:
May 3, 2022
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When mortgage rates are low, that presents an opportunity for homeowners to refinance their mortgages to take advantage of lower rates and huge savings. But rates are rising these days. What does this mean for homeowners who want to capitalize 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.

Mortgage Refinance Update for Portland, Oregon

For months, refinancing activity in Portland has dipped as mortgage rates have continued to inch up over the past year. As of the week of May 2, 2022, the mortgage rate for a 30-year fixed-rate mortgage sits at 5.1%. This is higher than where it was the same time last year.

Given the increase in mortgage rates, refinance activity has slowed over the past year. According to the Mortgage bankers Association’s Refinance Index, refinance activity decreased 71% from the same week last year. Mortgage interest rates have reached their highest levels since early 2020, putting downward pressure on refinance activity.

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Home Prices Rising Across Portland and the Entire State

Rising home values may also enable more Portland homeowners to refinance their mortgage loans in 2022. House prices across Portland have soared over the past year. In May 2022, Zillow reported that the median home price in Portland had increased 13.4% over the previous 12 months, and they are expected to continue to increase throughout 2022. Right now, home prices in Portland are averaging $588,143.

In the state of Oregon as a whole, the average home price is currently $509,539. Prices have increased 19.7% over the past 12 months, according to Zillow..

Rising house values give homeowners more equity, which can make it easier to qualify for a refinance loan. 

Related: Portland Real Estate Prediction: Low Inventory Will Boost Prices

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 2022? 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, including our Diamond Homebuyer Program, Cash Buyer Program, and Bridge Loans. We have been helping borrowers since 1992, and we’d be happy to help you too. Please contact us if you have mortgage-related questions.

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