Today, multiple closely followed refinance rates sunk lower.
Both the 15-year fixed and 30-year fixed saw their mean rates slump. At the same time, average rates for 10-year fixed refinances also trailed off.
Refinance rates have skyrocketed through the first months of 2022. Short-term interest rates have already been raised three times by the Federal Reserve this year, and more are to come.
In the current financial climate, homeowners should carefully consider whether it’s the right time to refinance. Simply put, the cost of refinancing is increasing because rates are higher. With that in mind, your refinance rate isn’t the only thing that matters. Refinance closing costs can average 3% to 6% of the loan balance and in the short run, could be more expensive than the interest you pay.
Let’s take a look at where refi rates are and what it means for you.
Take a look at today’s refinance rates:
- The average 30-year fixed-rate refinance is 6.75%
- The average 15-year fixed refinance rates is 6.18%
- Today, the average 10-year fixed refinance rate is 6.24%
Refinance Rate Forecast: What Is Driving Mortgage Rate Change?
The Consumer Price Index (CPI) for September shows inflation is still high at 8.2%And that means refi rates are likely to see more increases as long as inflation remains high.
In response to high inflation that has lasted longer than initially anticipated, the Federal Reserve has increased interest rates in May, June, and July. A prolonged period of high inflation would make the Federal Reserve more likely to increase rates even more dramatically.
Is Now a Good Time to Refinance?
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. However, as rates have risen, the number of homeowners with rates well above current market rates has diminished dramatically.
There are alternatives to refinancing. With values rising in today’s housing market, homeowners may want to turn that value into cash. With rates where they are, a home equity line of credit (HELOC) may make sense for you because you won’t have to take out a new mortgage. In some situations, a HELOC can make sense, especially when consolidating debt or remodeling your home.
Pro Tip: Refinance Closing Costs
Fees associated with refinancing a mortgage are known as closing costs. Fees can average 3% to 6% of your loan balance so it’s important to pay attention to them. You may be lower your monthly payment, but pay attention to how long it will take your monthly savings to outweigh what you paid to refinance.
30-Year Fixed Refinance Rates
Right now, the average 30-year fixed refinance has an interest rate of 6.75%, a decrease of 11 basis points over the previous week.
You can use our mortgage calculator to price out your monthly mortgage payments 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 Refi Rates
For 15-year fixed refinances we’re seeing an average rate of 6.18%, a decrease of 4 basis points from what we saw last week.
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.
10-Year Refi Rates
The average 10-year, fixed refinance rate is 6.24%, a decrease of 12 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
The table below shows refinance rates trends from the past week.
These refi rates are supplied by Bankrate. The information is based on consumers that fit a certain profile, such as the home is an owner occupied single family residence. If your financial profile doesn’t meet or exceed the standards of Bankrate’s survey, then it’s likely you’ll end up with a refi rate higher than what’s listed..
Bankrate is owned by Red Ventures, Nextadvisor’s parent company.
|30-year mortgage refinance rate||6.75%||6.86%||-0.11|
|15-year fixed refinance rate||6.18%||6.22%||-0.04|
|10-year fixed refinance rate||6.24%||6.36%||-0.12|
Rates as of November 25, 2022.
Refinance Rate Frequently Asked Questions (FAQ):
Is Now Still a Good Time to Refinance?
While refinance rates are higher than recent record lows, they are still exceptionally low. 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.
When deciding whether to refinance, interest rates are not the only factor to consider. You’ll also need to weigh how long you have left to pay off your current mortgage and to consider the repayment term of a new home loan. A 30-year refinance loan may not make sense for you depending on how long you’ve had your current mortgage. 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
Refinance rates are influenced by your personal finances. Having a healthier credit score and better loan-to-value (LTV) ratios will generally be able to get lower refinance mortgage rate.
Your personal finances aren’t the only factor that impacts the refinance interest rate you qualify for. Your property’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.
The type of mortgage loan has an affect on your refinance rate. A shorter-term refinance loan usually has lower refinance rates than loans with longer repayment terms, all else equal. Your refinance rate is also affected by the type of refinance loan you plan on taking out. Cash-out mortgage refinance loans typically have higher interest rates than other loans.
How Much Does Refinancing Cost?
There are a handful of things to consider that influence the cost of refinancing, including:
- Type of mortgage
- The lender
- Loan amount
- Your credit score
- Home’s equity
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.
Current Mortgage Rates by Loan Type
Mortgage Refinance Rates
Home Loan Rates
- 30 Year Fixed Mortgage Rates
- 20 Year Fixed Mortgage Rates
- 15 Year Fixed Mortgage Rates
- 10 Year Fixed Mortgage Rates