Today, a few benchmark mortgage refinance rates made gains.
Both the 15-year fixed and 30-year fixed saw their mean rates rise. The average rate on 10-year fixed refinance mortgages decreased.
The need to shop around for the best refinance rate is becoming more and more important as refinance rates rise. Adding to the pressure rates have been under is the recent Federal Reserve decision to raise short-term rates again. The increase in May was 50 basis points and more increases are expected from the Fed this year
“There have been bigger moves in mortgage rates in the past, but they took significantly longer to unfold,” says Greg McBride, chief financial analyst at Bankrate, recently told NextAdvisor. In the near term, one of the top ways to offset rising rates is to get quotes from at least two or three lenders.
The best deal on a mortgage refinance typically comes down to finding the lender with the lowest combination of fees and rate. Significantly higher closing costs could be buried underneath an exceptionally low teaser refi rate. When choosing the best refinance loan for you, don’t focus on just a single number.
Here’s how refinance rate movement could impact you and where they’re at today.
Refinance rates currently are:
- Today, the average 30-year fixed refinance rate is 5.53%
- The average 15-year fixed refinance rates is 4.83%
- Currently, the average 10-year fixed-rate refinance is 4.81%
Refinance Rate Trends
Since the start of the year, refinance rates have already risen significantly and are expected to increase further in 2022, according to some experts. Behind this rise are the actions taken by the Federal Reserve to reduce its purchasing of mortgage-backed securities and its decision to increase short-term interest rates.
The Federal Reserve was spurred to action by historically high inflation, which hit an annual rate of 8.5% in March. Russia’s war in Ukraine has only added to the uncertainty and has potential to keep inflation rates elevated.
Another factor that could affect rates is COVID-19. While the Omicron variant has faded in much of the United States, a resurgence of the virus could affect markets. That’s nearly impossible to predict, and experts say it looms as a possible source of more volatility.
Is It a Good Time to Refinance Right Now?
A rate and term refinance can save you money in the long run, but typically you’ll want the new rate to be at least 0.75% to 1% below your current rate. And the number of homeowners with rates well above the current market rates has dwindled dramatically as rates have risen.
In this hot housing market, the ability to turn the equity in your home into cash with a home equity line of credit (HELOC) has become increasingly popular. A HELOC can be a reasonable option for financing home repairs or improvements, just be sure to understand all of the fine print regardless fees, the interest rate and the repayment schedule..
Why Is It Important to Look at the History of the 30-Year Fixed Mortgage Rate?
Current mortgage interest rates are still within a normal historical range, even if they’re breaking through the psychological barrier of 5%. However, refinancing is still a viable option when your existing rate is significantly higher than the prevailing rates.
The above chart references Freddie Mac data, which differs slightly but follows similar trends to the Bankrate survey used by NextAdvisor.
Pro Tip: What to Know About Refinance Fees
When you take out a new home loan, you’ll 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 Fixed Refinance Rates
Right now, the average 30-year fixed refinance has an interest rate of 5.53%, an increase of 9 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 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.
15-Year Fixed Refi Rates
Right now, average 15-year fixed refinance rates are 4.83%, an increase of 7 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 4.81%, a decrease of 1 basis points from a week ago.
Monthly payments with a 10-year refinance term would cost a significant amount more per month than you would with a 15-year term, but you’ll pay less interest in the long term.
How we calculate our refinance rates
The table below shows where refinance rates were headed in the last week.
These daily refi rates are provided by Bankrate. The information is based on borrowers that meet specific criteria, such as the home is an owner occupied single family residence. So you may qualify for different rates if your financial situation don’t align with the survey criteria.
Bankrate is owned by Red Ventures, Nextadvisor’s parent company.
|30-year mortgage refinance rate||5.53%||5.44%||+0.09|
|15-year fixed refinance rate||4.83%||4.76%||+0.07|
|10-year fixed refinance rate||4.81%||4.82%||-0.01|
Rates as of May 11, 2022.
Refinance Rate Frequently Asked Questions (FAQ):
Is Now Still a Good Time to Refinance?
Refinancing isn’t solely dependent on the numbers, like the refinance rate, your situation is also a big factor. Consider whether or not refinancing fits into your life plans and financial desires
Refinancing can be a good idea if you can cut your interest rate enough to offset the upfront closing costs. There are times, however, when the main reason for refinancing isn’t to secure a lower interest rate. With home values rising, many homeowners are choosing to turn their new found equity into cash with a HELOC. If you’re going to open a home equity line of credit you’ll want to have a plan for the money beforehand. HELOCs have higher interest rates than mortgages and you’ll be increasing what you owe at the same time.
As long as refinancing aligns with your financial goals and gets you closer to achieving them, then now is a good time to refinance.
How to Qualify for the Best Refi Rate
Refinance rates vary depending on your personal financial situation. If you have a higher credit score and better loan-to-value (LTV) ratios will generally receive a greater reduction on their interest rate.
But your personal financial situation isn’t the only consideration that affects your refinance rate. The equity you have in the property also comes into play. 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 your refinance rate. A loan with a shorter repayment term typically has lower rates than a longer-term loan. Your interest rate is also impacted by the type of refinance loan you plan on taking out. A cash-out refinance loan typically has a refinance rate than other types of refinance loans.
How Much Does Refinancing Cost?
How much it costs to refinance can vary widely depending on these factors:
- Where the property is located
- Type of refinance loan
- Your lender
- Loan balance
- FICO 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.
Current Mortgage Rates by Loan Type
Mortgage Refi Rates
Home Loan Interest Rates
- 30 Year Fixed Mortgage Rates
- 20 Year Fixed Mortgage Rates
- 15 Year Fixed Mortgage Rates
- 10 Year Fixed Mortgage Rates