Refinancing in North Dakota: What the Data Shows
North Dakota’s refinance market is one of the smallest in the nation by volume, reflecting the state’s modest population of roughly 779,000 residents. However, the data reveals a surprisingly healthy picture for homeowners who do pursue refinancing. With a denial rate well below the national average and a strong concentration of local lenders, North Dakota borrowers may find refinancing more accessible than homeowners in many other states. Here is what the latest data tells us about refinancing in the Peace Garden State.
Refinance Activity Overview
In 2023, North Dakota recorded 972 refinance originations, with an average loan amount of $355,401. While the origination volume is small, representing less than 1% of the national total of 435,709 refinance originations, the average loan amount is notable for a state with a median home value of just $241,100. This gap suggests that many North Dakota refinancers may be rolling in closing costs, refinancing investment properties, or carrying larger balances from prior purchases in higher-cost areas.
The state’s homeownership rate stands at 63.41%, and the median household income is $75,949. Together with the relatively affordable median home value, these figures point to a housing market where many homeowners may have manageable debt-to-income ratios, a key factor in qualifying for a refinance.
How North Dakota Compares to National Averages
North Dakota stands out in several important ways when measured against national benchmarks:
- Denial rate: North Dakota’s refinance denial rate is 14.66%, compared to the national average of 27.87%. That means North Dakota applicants are approved at significantly higher rates than the typical U.S. borrower.
- Average loan amount: At $355,401, the average refinance loan in North Dakota is below the national average of $410,429, consistent with the state’s lower home values.
- Volume: With 972 originations out of 435,709 nationally, North Dakota accounts for roughly 0.22% of all refinance activity, which is proportional to its small population.
The low denial rate is particularly encouraging. It may reflect a combination of strong borrower profiles, conservative lending practices, and the involvement of community-focused financial institutions that know their local markets well.
Loan Type Breakdown
The refinance loan mix in North Dakota skews heavily toward conventional financing:
- Conventional: 93%
- FHA: 4%
- VA: 3%
A 93% conventional share is notably high. This typically signals that borrowers have strong credit profiles and sufficient home equity to qualify without government-backed programs. The low FHA share (4%) suggests fewer borrowers need the more lenient credit and down payment requirements that FHA loans offer. The 3% VA share is relatively modest, though this may simply reflect the demographics of the state’s homeowner population. Homeowners currently in FHA loans may want to explore whether refinancing to a conventional loan could eliminate mortgage insurance premiums, potentially generating meaningful monthly savings.
Top Lenders in North Dakota
The most active mortgage lenders in North Dakota by HMDA filing volume are dominated by local and regional institutions:
- Gate City Bank (2,841 filings)
- First Community Credit Union (1,081 filings)
- First International Bank & Trust (788 filings)
- U.S. Bank National Association (612 filings)
- Bell Bank (611 filings)
Gate City Bank leads by a wide margin, with more than twice the filing volume of the next closest lender. The prominence of community banks and credit unions is a distinctive feature of North Dakota’s mortgage market. These institutions often offer competitive rates and personalized service. However, it is always wise to compare offers from multiple lenders. You can explore options through our best refinance lenders page to get a broader picture of what is available.
Current Rate Environment
As of the latest data, current mortgage rates stand at:
- 30-year fixed: 6.38%
- 15-year fixed: 5.75%
For homeowners who locked in rates during the 2020-2021 low-rate environment (when rates dipped below 3%), refinancing at today’s levels would generally not make financial sense. However, if you purchased or last refinanced when rates were above 7%, today’s rates could offer meaningful savings. The key question is always whether the monthly savings justify the closing costs, which is where calculating your break-even point becomes essential.
State Regulations and Closing Costs
North Dakota offers a relatively borrower-friendly regulatory environment for refinancing:
- Attorney requirement: North Dakota does not require an attorney at closing, which can help keep closing costs lower compared to states that mandate legal representation.
- Recording taxes: There is no mortgage recording tax in North Dakota. Borrowers pay only flat recording fees, which is a notable advantage. In some states, recording or mortgage taxes can add hundreds or even thousands of dollars to refinance costs.
- Right of rescission: As with all states, North Dakota refinance borrowers are protected by the federal 3-business-day right of rescission. After signing your closing documents, you have three business days to cancel the transaction without penalty.
The absence of both an attorney requirement and recording taxes makes North Dakota one of the more cost-effective states for refinancing from a regulatory standpoint.
State Housing Programs
The North Dakota Housing Finance Agency (NDHFA) offers homebuyer assistance through programs like HomeAccess and Start. These programs are primarily designed for home purchases rather than refinancing. However, homeowners who originally used an NDHFA program should check with the agency to see if any refinance options or guidance are available for existing borrowers. It is also worth monitoring the NDHFA website for any new programs that may emerge as market conditions change.
Consumer Complaints
Given North Dakota’s small population and the dominance of community-based lenders, the state generally sees lower complaint volumes compared to larger markets. Regardless, borrowers should always review lender reputations and be aware of their right to file complaints with the Consumer Financial Protection Bureau (CFPB) if issues arise during the refinance process.
Tips for North Dakota Homeowners Considering Refinancing
If you are thinking about refinancing in North Dakota, here are some practical steps to consider:
- Run the numbers first. Use our refinance calculator to estimate your potential savings based on your current loan balance, rate, and term.
- Calculate your break-even point. Our break-even calculator can help you determine how long it will take for monthly savings to offset your closing costs.
- Get multiple quotes. While local lenders like Gate City Bank and Bell Bank are very active in the state, comparing at least three to four offers typically helps you secure the best rate and terms.
- Consider your loan type. If you currently have an FHA loan with mortgage insurance, refinancing to a conventional loan may be beneficial if you have at least 20% equity.
A Worked Example
Consider a North Dakota homeowner with a $241,100 mortgage (matching the state’s median home value) at a 7.25% interest rate on a 30-year term. Their current monthly principal and interest payment would be approximately $1,644. If they refinanced to today’s 30-year fixed rate of 6.38%, that payment would drop to roughly $1,504, a savings of about $140 per month.
Assuming closing costs of approximately $3,500 (benefiting from North Dakota’s lack of recording taxes and no attorney requirement), the break-even point would be around 25 months. If this homeowner plans to stay in the home for at least three to five years, the refinance could generate thousands of dollars in long-term savings. Use our refinance calculator to run your own numbers with your specific loan details.
The Bottom Line
North Dakota’s refinance market is small but efficient. With a denial rate nearly half the national average, a strong presence of community lenders, no mortgage recording tax, and no attorney requirement at closing, the state offers a favorable environment for homeowners looking to refinance. The key is ensuring that today’s rate represents a meaningful improvement over your current rate and that you plan to stay in your home long enough to recoup closing costs. Take the time to compare lenders, calculate your break-even point, and make a decision grounded in your own financial situation.