2 of 3 closely watched refinance interest rates cruised higher today compared to a week ago, according to data compiled by Bankrate.
- 30-year fixed refinance rate: 3.87%, +0.12 vs. a week ago
- 15-year fixed refinance rate: 3.23%, +0.08 vs. a week ago
- 10-year fixed refinance rate: 3.25%, +0.14 vs. a week ago
Here’s a pro tip: Getting multiple offers can save you thousands of dollars over the life of your mortgage. “The extra effort of comparison shopping among lenders and putting in an extra application or two can pay dividends for years with a lower rate and savings on fees,” says Greg McBride, CFA, Bankrate chief financial analyst.
- 30-year fixed refinance
- 15-year fixed refinance
- 10-year fixed refinance
- Where will refinance rates head in the future?
- What is a mortgage refinance?
- 30-year refi? 15-year refi? Cash-out? What is right for me?
- How much does it cost to refinance?
- How much can you save by refinancing? Is it a good time to refi?
- How to shop for a mortgage
- Steps to get the best mortgage rate
- Minimum credit scores for different kinds of mortgages
- Shopping for a mortgage lender?
- Learn more
30-year fixed refinance
The average 30-year fixed-refinance rate is 3.87 percent, up 12 basis points since the same time last week. A month ago, the average rate on a 30-year fixed refinance was lower, at 3.44 percent.
At the current average rate, you’ll pay $468.24 per month in principal and interest for every $100,000 you borrow. That’s an extra $6.83 compared with last week.
You can use Bankrate’s mortgage calculator to figure out your monthly payments and see what the effects of making extra payments would be. It will also help you calculate how much interest you’ll pay over the life of the loan.
15-year fixed refinance
The average for a 15-year refi is currently running at 3.23 percent, up 8 basis points over the last week.
Monthly payments on a 15-year fixed refinance at that rate will cost around $428 per $100,000 borrowed. That’s clearly much higher than the monthly payment would be on a 30-year mortgage at that rate, but it comes with some big advantages: You’ll come out thousands of dollars ahead over the life of the loan in total interest paid and build equity much more quickly.
10-year fixed refinance
The average rate for a 10-year fixed-refinance loan is 3.25 percent, up 14 basis points over the last week.
Monthly payments on a 10-year fixed-rate refi at 3.25 percent would cost $434.66 per month for every $100,000 you borrow. That’s a lot more than the monthly payment on even a 15-year refinance, but in return you’ll pay even less in interest than you would with a 15-year term.
Where will refinance rates head in the future?
Since the start of the coronavirus pandemic in 2020, rates have been hovering around historic lows. But now rates are increasing as the Federal Reserve acts to contain inflation. Most experts expect rates to jump through 2022.
“Mortgage rates continue to surge, as they have since the beginning of the year, as the outlook takes shape for Fed rate hikes that are sooner and faster than previously expected,” McBride says. “Mortgage rates are still well below 4 percent but in an environment of already sky-high home prices, more would-be homebuyers are priced out with each move higher in mortgage rates.”
To see where Bankrate’s panel of experts expect rates to go from here, check out our Rate Trend Index.
Want to see where rates are right now? See local mortgage rates.
Last updated February 4, 2022.
What is a mortgage refinance?
Refinancing your mortgage means taking out a new home loan. In the process, you’ll fully pay off your existing loan, and then start payments on a new one. The two most common kinds of mortgage refinances are rate-and-term changes — which result in a new interest rate and a reset payment clock — and cash-out refinances. The latter allow homeowners to take advantage of their home equity by taking out a new mortgage with a larger principal based on the home’s current value.
30-year refi? 15-year refi? Cash-out? What is right for me?
No matter what kind of refinance you decide to undertake, once you close on your new loan, the payment clock goes back to zero. So, for example, if you take out a new 30-year mortgage, you’ll have another 30 years of payments ahead of you.
That said, a 30-year refi is the right choice for a lot of people. Extending the term of your loan means lower monthly payments, which can ease the squeeze if you find yourself with a tight budget.
A 15-year refinance has some advantages, too, namely that you pay a lot less interest over the life of the loan. Because 15-year loans tend to have lower interest rates than their 30-year counterparts and a shorter repayment window, the overall savings can be significant. Keep in mind, though, that a short repayment window is a double-edged sword. It does help you save in the long run, but with less time to pay, 15-year mortgages have higher monthly payments.
Here are sample payments on a $300,000 mortgage at 3 percent interest:
|Term||Monthly payment||Total cost|
A new mortgage can also help you tap your home equity if you choose a cash-out option. If you have enough equity in your home, you can apply for a new mortgage with a larger principal balance and take the difference from what you owe on your old loan in cash. Doing this can allow you to finance other spending at a low rate compared with other forms of borrowing. Some of the most common uses for cash-out funds are home improvements, debt consolidation or education financing.
How much does it cost to refinance?
Refinance costs can change based on where you’re located, the lender you’re working with and a range of other factors. The general rule of thumb, however, is that costs are around 2 to 5 percent of the loan’s principal amount. On a $300,000 mortgage, that comes out to $6,000 to $15,000 in closing costs.
How much can you save by refinancing? Is it a good time to refi?
Yes, depending on your situation. Especially with mortgage rates hovering at all-time lows, it’s a great time to refinance. If you have a loan that you’ve been holding since before 2020, you’re almost guaranteed to be able to refinance to a lower-rate loan. That can mean significant savings month to month and overall, so it’s worth exploring.
Remember, however, you’ll want to calculate your break-even timeline. If you’re planning to move soon, you may not save enough to recoup your closing costs before you do.
How to shop for a mortgage
Shopping around is crucial to get the best deal on your mortgage. Make sure to get quotes from at least three lenders, and pay attention not just to the interest rate but also to the fees they charge and other terms. Sometimes it’s a better deal to choose a slightly higher interest loan if the other aspects are favorable.
Steps to get the best mortgage rate
- Shop around
- Do your research to understand the mortgage market in your area
- Consider working with a mortgage broker
- Don’t try to time the market — rates change nearly constantly, and you could lose out on a good deal if you wait
Minimum credit scores for different kinds of mortgages
Different mortgages have different minimum requirements for their borrowers. Although lenders are able to adjust these numbers as they please, here are the most common credit score minimums for some common types of mortgages:
If your credit score is less than 500, work on improving it before applying for a mortgage, because most lenders won’t issue a loan to someone with a score of 499 or lower. On the other hand, if your credit score is higher than these minimums, you may be able to get a better interest rate.
Methodology: The rates you see above are Bankrate.com Site Averages. These calculations are run after the close of the previous business day and include rates and/or yields we have collected that day for a specific banking product. Bankrate.com site averages tend to be volatile — they help consumers see the movement of rates day to day. The institutions included in the “Bankrate.com Site Average” tables will be different from one day to the next, depending on which institutions’ rates we gather on a particular day for presentation on the site.
To learn more about the different rate averages Bankrate publishes, see “Understanding Bankrate’s Rate Averages.”