Today, a number of notable mortgage refinance rates ticked up.
Both the 15-year fixed and 30-year fixed saw their mean rates climb. At the same time, average rates for 10-year fixed refinances also saw growth.
Refinancing rates are constantly shifting. However, they’re still near lows that we’ve never seen before. For those looking to refinance their existing mortgage, this might be the right move to lock in a great deal on an interest rate.
Refinance rates currently are:
- Today, the average 30-year fixed refinance rate is 3.50%
- 15-year mortgage refinance rate: 2.74%
- 10-year mortgage refinance rate: 2.75%
Where Are Refinance Rates Headed in 2021?
Refinance and mortgage rates could in be for some ups and downs in the coming months. Nevertheless, interest rates are projected to continue to rise steadily throughout 2022. Two factors are responsible for this predicted rate rise: a high inflation rate that has persisted longer than expected and a strong economy. Additionally, the COVID-19 Omicron strain and other Coronavirus variants could affect the economy because of the economic uncertainty they could cause. Regardless of predictions by most experts that interest rates will rise in the near future, we are unlikely to see steady increases from day to day. So expect refinance rates to continue bouncing around.
What the Refinance Rate Trends Mean for You
There may be a marginal increase in refinance rates, but overall borrowers can be excited since rates are so low, and still near
In this hot housing market, the ability to turn the equity in your home into cash has become increasingly popular. In many situations, a cash-out refinance can make sense, especially when consolidating debt or remodeling your home.
Homeowners who are on the fence about refinancing will want to consider whether or not it makes sense for their situation. Refinance rates are likely to continue an upward trajectory in the long term, so it may be worth crunching the numbers with a few lenders to see if you can benefit.
What to Know About Refinance Fees
For a new mortgage, you will have to pay upfront fees totaling 3% to 6% of the loan amount. If you refinance, this is a significant expense you should take into account. Refinancing often or selling a house soon after refinancing can result in your monthly savings not exceeding the fees you paid.
30-Year Refinance Rates
Right now, the average 30-year fixed refinance has an interest rate of 3.50%, an increase of 20 basis points from what we saw last week.
You can use our mortgage calculator to get an idea of what your monthly payments will be and to understand how paying more each month will impact your mortgage. Our mortgage calculator will also show you how much interest you’ll be charged over the entire loan term.
Average 15-Year Refinance Rates
Right now, average 15-year fixed refinance rates are 2.74%, an increase of 19 basis points from a week ago.
Monthly payments on a 15-year refinance loan are tougher to fit into a monthly budget than a 30-year mortgage payment would be. However, a shorter loan term can save you thousands of dollars interest over the life of the loan.
Average 10-Year Fixed Refinance Rates
The average 10-year, fixed refinance rate is 2.75%, an increase of 19 basis points from what we saw last week.
Monthly payments with a 10-year refinance term would cost even more than what you’d pay on a 15-year loan. The upside is you’d end up paying even less interest over the life of the loan.
How we determine refinance rates
Our refi rate trends are based Bankrate’s daily rate data, which is owned by the same parent company as NextAdvisor. These daily refinance rate averages are based on a customer profile of the following:
- At least 20%+ equity
- Owner occupied home
- Credit score 740 or higher
- Single-family detached home
The information supplied to Bankrate from lenders across the country is provided in the table below:
|30-year mortgage refinance rate||3.50%||3.30%||+0.20|
|15-year fixed refinance rate||2.74%||2.55%||+0.19|
|10-year fixed refinance rate||2.75%||2.56%||+0.19|
Rates as of January 11, 2022.
Refinance Rate Frequently Asked Questions (FAQ):
Is Now Still a Good Time to Refinance?
Refinance rates, though higher than the all-time record lows, are still lingering at uncommonly low levels. The current time could still be the right time to refinance if you want to lower your mortgage payment by refinancing to a lower rate.
You should also consider other factors when deciding whether it is the right time for you to refinance. Refinancing into a new home loan can add years onto your mortgage. If you’re close to paying off your existing mortgage, then you’ll want to factor in the trade offs. If you’ve been paying on your current mortgage for 10 years, then you may want to refinance with a 20 years loan so that you aren’t adding years to the backend of your loan. If you opt for a shorter-term refinance, the trade off is that your monthly payment will be higher than with a longer loan.
Before you jump on an exceptionally low refinance rate, be sure that the overall deal makes sense for you.
How to Ensure You Get the Best Refinance Rate
Your financial situation has a big impact on the refinance rate you can qualify for. Having more equity in your home and a healthier credit score ordinarily will get you a better mortgage refinance rate.
Your situation isn’t the only consideration that affects your interest rate. A better loan-to-value ratio (LTV) can help you secure a discounted refinance rate. So it’s better to have more equity. You want to have at least 20% equity, or a loan-to-value ratio of 80% or less.
Even the mortgage itself has an affect on what your refinance rate will be. A shorter-term refinance loan usually has better interest rates than a longer-term loan. Your refinance interest rate is also affected by the type of mortgage refinance you plan on taking out. A cash-out refinance loan usually comes with a higher refinance rate than other types of home loan refinancing.
What Is the Average Cost of Refinancing?
What you’ll pay to refinance your mortgage can vary widely depending on these factors:
- Where the property is located
- Type of the mortgage
- What lender you choose
- Size of loan
- Your credit score
- The property’s equity
In general, refinance closing costs are 3% to 6% of the loan balance. The type of the loan you are refinancing into can impact its cost in a few different ways. Certain government-backed refinance loans, like the FHA Streamline or VA Interest Rate Reduction Refinance Loan (IRRRL) may not require an appraisal, but could come with hefty upfront fees to cover the mortgage insurance. On the other hand, if you have enough equity, you could refinance into a conventional loan to possibly get rid of the mortgage insurance requirement.