Multiple mortgage refinance rates moved up today, causing some homeowners to wonder if it’s too late to refinance. We saw increases in the average rates for 10-year fixed, 15-year fixed and 30-year fixed refinances. With rates expected to rise throughout 2022, now might be a good time to act on a refinance. But make sure to first think about your personal goals and circumstances, and compare offers to find a lender who can best meet your needs.
30-year fixed-rate refinance
The average 30-year fixed refinance rate right now is 3.72%, an increase of 4 basis points from what we saw 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. If you’re having difficulties making your monthly payments currently, a 30-year refinance could be a good option for you. 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 average 15-year fixed refinance rate right now is 3.14%, an increase of 14 basis points compared to one week ago. Refinancing to a 15-year fixed loan from a 30-year fixed loan will likely raise your monthly payment. 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 3.10%, an increase of 11 basis points compared to one week ago. A 10-year refinance will typically feature the highest monthly payment of all refinance terms, but the lowest interest rate. A 10-year refinance can help you pay off your house much faster and 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 started 2022 with low refinance rates, but there’s been an uptick recently due to two major factors: inflation and economic growth. That said, rates can always rise and fall for many reasons. The spread of omicron, for instance, kept rates low throughout December and the start of the new year. Overall, rates are expected to go up this year, particularly with the Federal Reserve’s decision to reduce its bond purchases.
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 supplied by lenders across the US:
Average refinance interest rates
|Product||Rate||A week ago||Change|
|30-year fixed refi||3.72%||3.68%||+0.04|
|15-year fixed refi||3.14%||3.00%||+0.14|
|10-year fixed refi||3.10%||2.99%||+0.11|
Rates as of Jan. 31, 2022.
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.
Having a high credit score, low credit utilization ratio, and a history of consistent and on-time payments will generally help you get the best interest rates. Researching interest rates online is always a good idea, but you’ll need to connect with a mortgage professional to get your exact refinance rate. You should also take into account any fees and closing costs that might offset the potential savings of a refinance.
Since the beginning of the pandemic, a lot of lenders have been stricter with who they approve for a loan. As such, you may not qualify for a refinance — or a low rate — if you don’t have a solid credit rating.
One way to get the best refinance rates is to strengthen your borrower application. The best way to improve your credit ratings is to get your finances in order, use credit responsibly, and monitor your credit regularly. You should also shop around with multiple lenders and compare offers to make sure you’re getting the best rate.
Is now a good time to 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. 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.
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? Also keep in mind that closing costs and other fees may require an upfront investment.
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. Refinancing at a lower interest rate can save you money in the long run and help you pay off your loan sooner. But a careful cost-benefit analysis is necessary to confirm that doing so makes sense.