Today, several benchmark mortgage refinance rates went up.
Both the 15-year fixed and the 30-year fixed saw their average rates increase. The average 10-year fixed rate refinance mortgage rate has also seen growth.
Throughout the first few months of 2022, refinance rates fell, rising dramatically. 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. With that in mind, your refinance rate isn’t the only thing that matters. The fees you pay to close a home loan deal and can add up to thousands of dollars.
Here is where the refinance rates are today.
Take a look at today’s refinance rates:
Take a look at local refinance rates.
Refinance Rate Forecast: What’s Driving Changes in Mortgage Rates?
In April, annual inflation was 8.3% according to the consumer price index (CPI). That still puts it on par with the 40-year highs we’ve seen in recent months. And that means refinance rates are likely to see more increases as long as inflation remains high.
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. And the impact of these events on inflation may not be felt right away. “The pain of the April and March lockdown is not yet fully felt in the manufacturing sector outside of China,” Lindsey Piegza, chief economist at Stifel Financial told NextAdvisor.
If we end up with high inflation for an extended period, then the odds of the Federal Reserve raising rates significantly increase.
Is it a good time to refinance now?
A rate and term refinance can save you money in the long run, but you generally want the new rate to be at least 0.75% to 1% lower than your 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. For those looking to consolidate high-interest debt or make much-needed home repairs or upgrades, a HELOC might make sense. If you go this route, you’ll want to understand the repayment schedule, interest rate, and fees, as they may differ from a traditional mortgage.
Why is it important to look at the 30-year fixed mortgage rate history?
Although today’s refinance rates are near or above 5%, this has historically been a typical interest rate. If your current rate is higher than current rates, a refinance might be a good option.
This chart, which uses data from a Freddie Mac survey that differs slightly but generally follows the Bankrate survey used by NextAdvisor. This graph provides an overview of how today’s rates compare to those of the past two decades. They’re up from the all-time lows of 2020 and 2021, but they’re still not absurdly high if you zoom out further.
Pro Tip: Pay Attention to Refinance Fees
For a new mortgage, you will have to pay an initial fee totaling 3% to 6% of the loan amount. If you are refinancing, this is a major expense to consider. If you refinance too frequently or sell your home soon after refinancing, your monthly savings may not have exceeded the initial costs.
30-year fixed refi rates
Currently, the average 30-year fixed refinance has an interest rate of 5.38%, an increase of 16 basis points from the previous week.
You can use our mortgage calculator to get an idea of what your monthly payments will be and to understand the impact of paying more each month on your mortgage. Our Mortgage Calculator will also tell you how much interest you will be charged over the life of the loan.
Fixed refinancing rates over 15 years
Currently, the average 15-year fixed refinance rate is 4.62%, an increase of 9 basis points from the previous week.
The monthly payments on a 15-year refinance loan will be larger than those on a 30-year refinance at the same rate. However, a shorter loan term can help you build equity in your home much faster.
10-year fixed refi rates
The average 10-year fixed refinance rate is 4.52%, an increase of 11 basis points from a week ago.
Monthly payments with a 10-year refinance term would cost even more than what you would pay on a 15-year loan. The upside is that you’ll end up paying even less interest over the life of the loan.
How we determine refi rates
The chart below shows refinance rate trends over the past week.
These daily refi rates are collected by Bankrate. The information is based on customers who fit a certain profile, such as the home being an owner-occupied single-family residence. If your personal situation does not meet or exceed the guidelines of this survey, you are likely to end up with a higher refi rate than indicated.
Bankrate is owned by Red Ventures, the parent company of Nextadvisor.
Rates as of June 3, 2022.
Take a look at mortgage refinance rates for a number of different loans.
Frequently asked questions (FAQ) about the refinance rate:
Is it still a good time to refinance?
It’s not just about interest rates or home values when it comes to refinancing, your personal circumstances also play an important role. The simple question to ask yourself is, “Will refinancing help me achieve my financial goals?”
Generally speaking, 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. With rising home values, many homeowners are choosing to turn their new equity into cash 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.
Ultimately, now is a good time to refinance if refinancing fits your financial goals and helps you achieve them.
How to make sure you get the lowest refi rate
Your financial situation has a big effect on the refinance rate you get. Having a lower loan-to-value ratio for your home and a higher credit score will usually get you a better refinance rate.
Your personal finances aren’t the only considerations that affect the interest rate you qualify for. A lower loan-to-value (LTV) ratio will help you get a lower refinance rate. So the more equity you have accumulated, the better. Having at least 20% equity in your property is ideal.
The type of mortgage affects what your refinance rate will be. A loan with a shorter repayment term generally has better refinance rates than a loan with longer terms. Also, if you want to turn your equity into cash with a cash refinance, you will have to pay a higher interest rate, compared to other types of refinance.
How much does it cost to refinance?
Several factors affect the cost of refinancing, including:
- Where is the property located
- Type of refinance loan
- Your lender
- Amount of the loan
- FICO score
- The equity you have in the home
Typically, refinance closing costs are 3% to 6% of the loan balance. State and local regulations may influence the 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, get a lower rate, and compete with lenders for your business.
Current Mortgage Rates by Loan Type
Mortgage refinance rate
Home Loan Interest Rates
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