A few closely followed mortgage refinance rates ticked up today, including 30-year fixed refinances. The average rates on 10- and 15-year fixed refinances also moved upward slightly. Although refinance rates are always moving, they have been at historic lows. If you plan to refinance your home, now might be an optimal time to secure a good rate. Before refinancing, remember to think about your personal needs and financial situation, and shop around for various lenders to find the best one for you.
30-year fixed-rate refinance
The average rate for a 30-year fixed refinance loan is currently 3.22%, an increase of 6 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) Refinancing to a 30-year fixed loan from a shorter loan term can lower your monthly payments. This makes 30-year refinances good for people who are having difficulties making their monthly payments or simply want a bit more breathing room. However, interest rates for a 30-year refinance will typically be higher than rates for a 15-year or 10-year refinance. It’ll also take you longer to pay off your loan.
15-year fixed-rate refinance
The average 15-year fixed refinance rate right now is 2.46%, an increase of 1 basis points over last week. Refinancing to a 15-year fixed loan from a 30-year fixed loan will likely raise your monthly payment. But you’ll save more money over time, because you’re paying off your loan quicker. You’ll also typically get lower interest rates compared to a 30-year loan. This can help you save even more in the long run.
10-year fixed-rate refinance
The average 10-year fixed refinance rate right now is 2.46%, an increase of 2 basis points from what we saw the previous week. You’ll pay more every month with a ten-year fixed refinance compared to a 30-year or 15-year refinance — but you’ll also have a lower interest rate. A 10-year refinance can be a good deal, since paying off your house sooner will help you save on interest in the long run. However, you should analyze your budget and current financial situation to make sure you’ll be able to afford the higher monthly payment.
Where rates are headed
We track refinance rate trends using information collected by Bankrate, which is owned by CNET’s parent company. Here’s a table with the average refinance rates provided by lenders across the country:
Average refinance interest rates
|Product||Rate||A week ago||Change|
|30-year fixed refi||3.22%||3.16%||+0.06|
|15-year fixed refi||2.46%||2.45%||+0.01|
|10-year fixed refi||2.46%||2.44%||+0.02|
Rates as of Dec. 28, 2021.
How to find the best refinance rate
When looking for refinance rates, know that your specific rate may differ from those advertised online. Though current market conditions will be a factor, your particular interest rate will depend largely on your application and credit history.
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. And don’t forget about fees and closing costs which may cost a hefty amount upfront.
You should also know that many lenders have had stricter requirements when it comes to approving loans in the past few months. This means that if you don’t have great credit ratings, you might not be able to take advantage of lowered interest rates — or qualify for a refinance in the first place.
Before applying for a refinance, you should make your application as strong as possible in order to get the best rates available. The best way to improve your credit ratings is to get your finances in order, use credit responsibly, and monitor your credit regularly. Also be sure to compare offers from multiple lenders in order to get the best rate.
When should I refinance?
Most people refinance because the market interest rates are lower than their current rates or because they want to change their loan term. Interest rates in the past few months have been at historic lows, but that’s not the only thing you should be looking at when deciding whether to refinance.
Make sure to consider your goals and financial situation, including how long you plan to stay in your current home. It’s helpful to have a specific goal for a refinance — such as decreasing your monthly payment or adjusting the term of your loan. Also keep in mind that closing costs and other fees may require an upfront investment.
Note that some lenders have tightened their requirements since the beginning of the pandemic. If you don’t have a solid credit score, you may not qualify for the best rate. 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.
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