Today, multiple benchmark mortgage refinance rates climbed.
Both the 15-year fixed and 30-year fixed saw their average rates go up. The average rate on 10-year fixed refinance mortgages also moved up.
Refinancing rates are constantly shifting. However, they’re presently low, making them a potentially great deal for borrowers. For those looking to refinance their existing mortgage, this can be a great opportunity to reduce your interest rate.
Take a look at today’s refinance rates:
- 30-year fixed refinance rates are averaging 3.54%
- The average 15-year fixed refinance rates is 2.82%
- Currently, the average 10-year fixed-rate refinance is 2.84%
Mortgage Rate Forecast: Where Are Refinance Rates Headed in 2021?
With refinance and mortgage rates, there is a high potential for significant volatility. However, overall, refinance interest rates are forecast to continue to increase through 2022. Several factors contributed to this anticipated rise in interest rates, including higher inflation and a strong economy. However, there is uncertainty surrounding the COVID-19 Omicron strain and the potential impact of other Coronavirus variants on the economy. 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
With interest rates hovering around 3% for a while now, refinancing can be a compelling option thanks to these historically low rates. But, you need to consider other factors besides your interest rate. It’s also important to consider your financial and life goals. Refinancing may not make sense if you plan to move and sell the home with the next five years. Depending on how long you keep the new loan, the ongoing savings may not be enough to offset the upfront fees.
Refinance Closing Costs
When you choose to refinance your existing home loan, you’ll typically pay upfront fees known as closing costs. These fees are important to pay attention to because they can average 3% to 6% of your loan balance. Even though your monthly payment may be lower, keep an eye on the length of time it will take for your monthly savings to outweigh what you paid to refinance.
30-Year Refinance Rates
Right now, the average 30-year fixed refinance has an interest rate of 3.54%, an increase of 19 basis points from a week ago.
You can use our mortgage calculator to get an idea of what your monthly payments will be and to understand how much you could save if you made extra payments. Our mortgage calculator will also show you how much interest you’ll be charged over the entire loan term.
15-Year Fixed Refi Rates
Currently, the average rate for a 15-year fixed refinance loan is 2.82%, an increase of 24 basis points from a week ago.
Monthly payments on a 15-year refinance loan can be a considerable amount more than what you’d get with a 30-year mortgage. However, a shorter loan term can help you build up equity in your home much more quickly.
Average 10-Year Refinance Rates
The average 10-year, fixed refinance rate is 2.84%, an increase of 25 basis points from a week ago.
Monthly payments with a 10-year refinance term would cost a lot more per month than you would with a 15-year term, but you’ll pay less interest in the long term.
How our refinance rates are calculated
The table below shows refinance rates trends from the past week.
These daily refinance rates are provided by Bankrate. The information is based on homeowners that fit a certain profile, such as the loan is for a primary residence and their FICO score is 740 or higher. If your personal situation doesn’t meet or exceed the standards of this survey, then you will likely qualify for higher refinance rates than those listed.
Bankrate is owned by Red Ventures, Nextadvisor’s parent company.
|30-year mortgage refinance rate||3.54%||3.35%||+0.19|
|15-year fixed refinance rate||2.82%||2.58%||+0.24|
|10-year fixed refinance rate||2.84%||2.59%||+0.25|
Rates as of January 12, 2022.
Refinance Rate Frequently Asked Questions (FAQ):
Is It Still a Good Time to Refinance?
Refinance rates are still quite low even though they are up from the recent record lows. 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.
However, your interest rate isn’t the only factor to consider when determining if now 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. But shorter-term loans have higher monthly payments, so in that scenario your monthly payment would be larger than if you took out a new 30 year loan.
Before you jump on an exceptionally low refinance rate, be sure that the overall deal makes sense for you.
How to Qualify for the Best Refi Rate
Your financial situation has a big impact on the refinance rate you’ll be able to secure. Having a lower loan-to-value ratio for your home and a healthier credit score generally translates into a better mortgage refinance rate.
But your personal financial situation isn’t the only consideration that affects your refinance rate. Your home’s value compared to your loan balance also factors into the decision. You want to have at least 20% equity, or a loan-to-value ratio of 80% or less.
Even the mortgage itself can determine your mortgage refinance rate. A shorter-term refinance loan typically has better rates than a longer-term loan. The type of refinance you need makes a difference in the interest rate. Cash-out mortgage refinance loans typically have higher refinance rates than other loans.
What Is the Average Cost of Refinancing?
What you’ll pay to refinance your mortgage can vary widely depending on these factors:
- Type of mortgage
- Your lender
- Loan balance
- Your credit score
- The equity you have in the home
In general, refinance closing costs are 3% to 6% of the loan balance. Your state and local regulations can influence what fees and taxes you pay. Having more equity in the home and a higher credit score will make it easier to qualify for the refinance loan, secure a lower rate, and to get lenders to compete for your business.