Current refinancing rates, July 25, 2022 | Check the lower fares
Today, several benchmark refinancing rates have fallen.
Both the 15-year fixed and the 30-year fixed saw their average rates fall. The average 10-year fixed rate refinance mortgage rate also fell.
Refinance rates soared at the start of this year and look set to continue their upward march. We have already seen multiple increases in short-term interest rates and the Fed has plans for more to come.
Given the current interest rate environment, it is prudent for borrowers to take a good look at the numbers before taking out a new home loan. In other words, the cost of refinancing increases because the rates are higher. That said, interest rates aren’t the only thing to focus on. The interest you pay over time is one thing, but the initial closing costs can be anywhere from 3% to 6% of the loan amount. That’s potentially thousands of dollars in fees.
Here is where the refinance rates are today.
The average mortgage refinance rates are as follows:
Take a look at local refinance rates.
Where are the refinancing trends?
The annual inflation rate there was 8.3% in April, according to data from the Bureau of Labor Statistics. That still puts it at the 40-year highs we’ve seen in recent months. And that’s not good for refinance rates.
In response to high inflation that lasted longer than originally expected, the Federal Reserve began raising interest rates. There are also geopolitical events that are about to add to our inflation problems. The COVID lockdowns in China and the war in Ukraine could both exacerbate existing supply shortages. These issues haven’t even hit the US yet, “it will take months for these disruptions to fully seep into the supply chain,” Lindsey Piegza, chief economist at Stifel Financial told NextAdvisor.
Because of all of this, we could be stuck with high inflation for much longer than we want, making it more likely that the Fed will have to raise interest rates aggressively.
Does refinancing still make sense?
Generally speaking, homeowners could save thousands of dollars with a rate and term refinance if their new rate is 0.75% to 1% lower than their current rate. That said, the recent spike in refinance rates has dramatically reduced the number of homeowners with interest rates well above today’s average rates.
In this hot housing market, the ability to turn your home equity into cash with a home equity line of credit (HELOC) has become increasingly popular. In some situations, a HELOC can make sense, especially when consolidating debt or renovating your home.
30 Year Fixed Mortgage Rate History
Current mortgage interest rates are still within a normal historical range, even though they are breaking through the psychological barrier of 5%. If your current rate is higher than current rates, a refinance might be a good option.
Historical rate trends shown in this chart refer to data compiled by Freddie Mac. NextAdvisor generally uses rate information collected by Bankrate. Although these mortgage rate surveys differ, they tend to show the same trends.
Pro tip: Refinance closing costs
When you take out a new home loan, you pay an upfront fee totaling 3-6% of the loan amount. If you are refinancing, this is a major expense to consider. Your monthly savings may not have exceeded the initial costs if you refinance too often or sell your home soon after refinancing.
30-year refinancing rate
Currently, the average 30-year fixed refinance has an interest rate of 5.59%, down 10 basis points from the previous week.
You can use our mortgage calculator to calculate the price of your monthly mortgage payments and to understand what the effects of additional payments would be. Our Mortgage Calculator will also tell you how much interest you will be charged over the life of the loan.
15-year refinancing rate
Right now, the average 15-year fixed refinance rate is 4.85%, down 8 basis points from what we saw last week.
The monthly payments on a 15-year refinance loan are harder 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 in interest over the life of the loan.
10-year fixed refinancing rates
The average 10-year fixed refinancing rate is 4.74%, down 7 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 run.
How our refi rates are calculated
Our rollover rate trends are based on daily rate data from Bankrate, which is owned by the same parent company as NextAdvisor. These daily average refinance interest rates are based on a consumer profile that meets the following criteria:
- At least 20% equity
- Principal residence
- Credit score of 740+
- Existing single family home (no new construction)
Information provided to Bankrate by lenders across the country is provided in the table below:
Rates as of July 25, 2022.
Take a look at mortgage refinance rates for a number of different loans.
Frequently asked questions (FAQ) about the refinance rate:
Should I refinance now?
Refinancing is not only about numbers, like the refinance rate, your situation is also an important factor. You’ll want to ask yourself if refinancing will help you achieve your goals
A rule of thumb is that refinancing makes sense if you can lower your interest rate by 1% or more. But sometimes the purpose of a refinance isn’t to lower your mortgage rate. Recently, more and more homeowners have taken advantage of increased home values with a HELOC. The money you get from a HELOC can be used for anything, but HELOCs generally have higher interest rates than other mortgages. It is therefore important to have a plan before deciding to take on more debt.
All in all, it’s still a great time to refinance as long as it makes sense for your situation.
How to make sure you get the best refinance rate
Refinance rates are influenced by your personal finances. Having a healthier credit rating and lower loan-to-value (LTV) ratios will generally result in a greater reduction in the mortgage refinance rates offered to them.
But your personal financial situation isn’t the only thing that will impact the refinance interest rate you qualify for. The equity in your home is also a factor in the decision. Having at least 20% equity in your property is ideal.
Even the mortgage itself has an effect on what your interest rate will be. A shorter-term refinance loan generally has lower rates than mortgage refinance loans with longer repayment terms, all other things being equal. Your refinance rate is also impacted by the type of refinance you plan to take out. A cash refinance loan generally has a higher refinance rate than other types of home loan refinance.
What is the average cost of refinancing?
Several factors affect the cost of refinancing, including:
- Where is the property located
- Type of refinance loan
- Which lender to choose
- Amount of the loan
- FICO score
- The net value of the property
Typically, refinance closing costs are 3% to 6% of the loan balance. The type of loan you refinance can impact its cost in different ways. Some government-backed refinance loans, like the FHA Streamline or the VA Interest Rate Reduction Refinance Loan (IRRRL) may not require an appraisal, but may come with high upfront fees to cover mortgage insurance. On the other hand, if you have sufficient equity, you can refinance into a conventional loan to eventually get rid of the mortgage insurance requirement.
Mortgage interest rate by type of loan
Mortgage refinance rate