A few closely followed mortgage refinance rates advanced today. Both 15-year fixed and 30-year fixed refinances saw their mean rates increase. At the same time, average rates for 10-year fixed refinances also increased.
Though refinance rates do fluctuate slightly on a daily basis, homeowners can expect to see rates rise over the course of this year. In recent months, rates have been trending up from historic lows seen during the pandemic, and are now closer to 2018 rate levels. That means if you’re looking to shave dollars and interest off of your current monthly mortgage payments, these could be the lowest rates of 2022. Make sure to think about your goals and circumstances, and compare offers to find a lender who can meet your needs.
30-year fixed-rate refinance
The current average interest rate for a 30-year refinance is 5.42%, an increase of 16 basis points from what we saw one week ago. (A basis point is equivalent to 0.01%.) A 30-year fixed refinance will typically have lower monthly payments than a 15-year or 10-year refinance. Because of this, a 30-year refinance can be a good idea if you’re having trouble making your monthly payments. Be aware, though, that interest rates will typically be higher compared to a 15-year or 10-year refinance, and you’ll pay off your loan at a slower rate.
15-year fixed-rate refinance
The current average interest rate for 15-year refinances is 4.69%, an increase of 22 basis points over last week. A 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan. However, you’ll also be able to pay off your loan quicker, saving you money over the life of the loan. Interest rates for a 15-year refinance also tend to be lower than that of a 30-year refinance, so you’ll save even more in the long run.
10-year fixed-rate refinance
The current average interest rate for a 10-year refinance is 4.65%, an increase of 14 basis points over last week. Compared to a 30-year and 15-year refinance, a 10-year refinance will usually have a lower interest rate but higher monthly payment. A 10-year refinance can help you pay off your house much quicker and save on interest. But you should confirm that you can afford a higher monthly payment by evaluating your budget and overall financial situation.
Where rates are headed
At the start of the pandemic, refinance rates dropped to historic lows, but now interest rates are hovering around pre-pandemic levels. The Federal Reserve recently raised rates for the first time since 2018 and plans to increase them multiple times in 2022. Given this policy, along with strong economic growth and inflation, which reached its highest in four decades, rates are expected to keep going up this year. While there have been some temporary dips in interest rates, it’s impossible to predict when another drop might occur. That means it’s a good idea to try to take advantage of refinancing now and lock in a decent rate.
We track refinance rate trends using data collected by Bankrate, which is owned by CNET’s parent company. Here’s a table with the average refinance rates reported by lenders nationwide:
Average refinance interest rates
|Product||Rate||A week ago||Change|
|30-year fixed refi||5.42%||5.26%||+0.16|
|15-year fixed refi||4.69%||4.47%||+0.22|
|10-year fixed refi||4.65%||4.51%||+0.14|
Rates as of May 2, 2022.
How to find the best refinance rate
When searching for refinance rates online, it’s important to remember that your specific financial situation will influence the rate you’re offered. Market conditions aren’t the only factor in interest rates; your particular application and credit history will also play a large role.
To get the best interest rates, you’ll typically need a high credit score, low credit utilization ratio, and a history of making consistent and on-time payments. You can generally get a good feel for average interest rates online, but make sure to speak with a mortgage professional in order to see the specific rates you qualify for. You should also take into account any fees and closing costs that might offset the potential savings of a refinance.
You should also know that many lenders have had stricter requirements when it comes to approving loans in the past few months. If you have a low credit score or a poor credit history, you might have trouble getting a refinance at the lowest interest rates.
One way to get the best refinance rates is to strengthen your borrower application. You can do that by monitoring your credit, taking on debt responsibly, and getting your finances in order before applying for a refinance. Don’t forget to speak with multiple lenders and shop around to find the best rate.
When should I refinance?
Generally, it’s a good idea to refinance if you can get a lower interest rate than that your current interest rate, or if you need to change your loan term. While interest rates have been low in the past few months, you should look at more than just the market interest rates when deciding if a refinance is right for you.
A refinance may not always make financial sense. Consider your personal goals and financial circumstances. How long do you plan on staying in your home? Are you refinancing to decrease your monthly payment, pay off your house sooner — or for a combination of reasons? And don’t forget about fees and closing costs, which can add up.
Some lenders have tightened their requirements in recent months, so you may not be able to get a refinance at the posted interest rates — or even a refinance at all — if you don’t meet their standards. If you can get a lower interest rate or pay off your loan sooner, refinancing can be a great move. But carefully weigh the pros and cons first to make sure it’s a good fit for your situation.