Several benchmark refinance rates trailed off today. Both 15-year fixed and 30-year fixed refinances saw their average rates slump. At the same time, average rates for 10-year fixed refinances also declined. With rates expected to rise throughout 2022, now might be a good time to act on a refinance. If you’re a homeowner in the market for a refi, 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 rate for a 30-year fixed refinance loan is currently 4.08%, a decrease of 13 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) One reason to refinance to a 30-year fixed loan from a shorter loan term is to lower your monthly payment. Because of this, a 30-year refinance can be a good idea if you’re having trouble making your monthly payments. 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 current average interest rate for 15-year refinances is 3.34%, a decrease of 10 basis point from what we saw the previous week. A 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan. On the other hand, you’ll save money on interest, since you’ll pay off the loan sooner. 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 rate for a 10-year fixed refinance loan is currently 3.24%, a decrease of 15 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. Just be sure to carefully consider your budget and current financial situation to make sure that you can afford a higher monthly payment.
Where rates are headed
While throughout the pandemic we saw historically low refinance rates, there’s been a rise lately due to two critical factors: inflation and economic growth. However, rates can always fluctuate due to a variety of factors. The spread of omicron, for example, kept rates somewhat steady 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 increase interest rates.
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 supplied by lenders across the US:
Average refinance interest rates
| Product | Rate | Last week | Change |
|---|---|---|---|
| 30-year fixed refi | 4.08% | 4.21% | -0.13 |
| 15-year fixed refi | 3.34% | 3.44% | -0.10 |
| 10-year fixed refi | 3.24% | 3.39% | -0.15 |
Rates as of Mar. 7, 2022.
How to shop for refinance rates
When searching for refinance rates online, it’s important to remember that your specific financial situation will influence the rate you’re offered. Your interest rate will be influenced by market conditions as well as your credit history and application.
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. 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. 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.
To get the best refinance rates, you’ll first want to make your application as strong as possible. If you haven’t already, try to improve your credit by monitoring your credit reports, using credit responsibly, and managing your finances carefully. You should also shop around with multiple lenders and compare offers to make sure you’re getting the best rate.
When to consider a mortgage refinance
Most people refinance because the market interest rates are lower than their current rates or because they want to change their loan term. It’s true that in the past year, interest rates have been at a historic low. But when deciding whether to refinance, be sure to take into account other factors besides market interest rates.
To decide whether a refinance is right for you, consider all of the factors including how long you plan to stay in your current home, the length of your loan term and the amount of your monthly payment. 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.
