A few benchmark refinance rates receded today. Both 15-year fixed and 30-year fixed refinances saw their mean rates recede. At the same time, average rates for 10-year fixed refinances also decreased. 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
For 30-year fixed refinances, the average rate is currently at 4.08%, a decrease of 15 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 rate for a 15-year fixed refinance loan is currently 3.33%, a decrease of 15 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. 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 3.25%, a decrease of 15 basis points compared to one week ago. 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 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
While throughout the pandemic we saw historically low refinance rates, there’s been an uptick recently due to two critical factors: inflation and economic growth. But rates are dynamic and can change for a number of reasons. 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 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 | 4.08% | 4.23% | -0.15 |
| 15-year fixed refi | 3.33% | 3.48% | -0.15 |
| 10-year fixed refi | 3.25% | 3.40% | -0.15 |
Rates as of Mar. 9, 2022.
How to find the best refinance rate
It’s important to understand that the rates advertised online may not apply to you. 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. And don’t forget about fees and closing costs which may cost a hefty amount upfront.
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.
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. Don’t forget to speak with multiple lenders and shop around to find 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.
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. 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.
