Various mortgage refinance rates went up again today, making some homeowners wonder if it’s still a good time to refinance. There were increases in the average rates for 10-year fixed, 15-year fixed and 30-year fixed refinances, and rates are expected to rise throughout 2022. If you’re in the market for a refi, make sure to first think about your goals and circumstances, and always compare offers to find a lender who can best meet your personal needs.
30-year fixed-rate refinance
The average rate for a 30-year fixed refinance loan is currently 3.76%, an increase of 8 basis points compared to 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. If you’re having difficulties making your monthly payments currently, a 30-year refinance could be a good option for you. In exchange for the lower monthly payments though, rates for a 30-year refinance will typically be higher than 15-year and 10-year refinance rates. You’ll also pay off your loan slower.
15-year fixed-rate refinance
The average rate for a 15-year fixed refinance loan is currently 3.13%, an increase of 12 basis points compared to one week ago. With a 15-year fixed refinance, you’ll have a larger monthly payment than a 30-year loan. But you’ll save more money over time, because you’re paying off your loan quicker. 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 average 10-year fixed refinance rate right now is 3.20%, an increase of 22 basis points from what we saw the previous week. 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 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
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 and increase interest rates.
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 across the country:
Average refinance interest rates
| Product | Rate | A week ago | Change |
|---|---|---|---|
| 30-year fixed refi | 3.76% | 3.68% | +0.08 |
| 15-year fixed refi | 3.13% | 3.01% | +0.12 |
| 10-year fixed refi | 3.20% | 2.98% | +0.22 |
Rates as of Feb. 2, 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.
Generally, you’ll want a high credit score, low credit utilization ratio, and a history of making consistent and on-time payments in order to 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. Also remember to account for potential fees and closing costs.
Since the beginning of the pandemic, a lot of lenders have been stricter with who they approve for a loan. If you have a low credit score or a poor credit history, you might have trouble getting a refinance at the lowest interest rates.
Before applying for a refinance, you should make your application as strong as possible in order to get the best rates available. If you haven’t already, try to improve your credit by monitoring your credit reports, using credit responsibly, and managing your finances carefully. Also be sure to compare offers from multiple lenders in order to get the best rate.
When to consider a mortgage refinance
In order for a refinance to make sense, you’ll generally want to get a lower interest rate than your current rate. Aside from interest rates, changing your loan term is another reason to refinance. 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.
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. 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.
