A few important refinance rates declined today. Both 15-year fixed and 30-year fixed refinances saw their average rates go down. In addition, the average rate on 10-year fixed refinance also sank.
Though refinance rates do fluctuate slightly on a daily basis, homeowners can expect to see rates rise over the course of this year. In recent months, rates have been trending up from historic lows seen during the pandemic, and are now closer to 2018 rate levels. That means if you’re looking to shave dollars and interest off your current monthly mortgage payments, these could be the lowest rates of 2022. Make sure to think about your goals and circumstances, and compare offers to find a lender who can meet your needs.
30-year fixed-rate refinance
The current average interest rate for a 30-year refinance is 5.22%, a decrease of 9 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. 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
For 15-year fixed refinances, the average rate is currently at 4.52%, a decrease of 13 basis point over last week. 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
For 10-year fixed refinances, the average rate is currently at 4.45%, a decrease of 16 basis points from what we saw the previous week. Compared to a 30-year and 15-year refinance, a 10-year refinance will usually have a lower interest rate but higher monthly payment. 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
At the start of the pandemic, refinance rates dropped to historic lows, but now interest rates are hovering around pre-pandemic levels. The Federal Reserve recently raised rates for the second time in 2022, and plans to increase them several more times throughout the year. Given this policy, along with strong economic growth and inflation, which reached its highest in four decades, rates are expected to keep going up this year. While there have been some temporary dips in interest rates, it’s impossible to predict when another drop might occur. That means it’s a good idea to try to take advantage of refinancing now and lock in a decent rate.
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 refinance | 5.22% | 5.31% | -0.09 |
| 15-year fixed refinance | 4.52% | 4.65% | -0.13 |
| 10-year fixed refinance | 4.45% | 4.61% | -0.16 |
Rates as of May 30, 2022.
How to find personalized refinance rates
It’s important to understand that the rates advertised online may not apply to you. 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.
You should also know that many lenders have had stricter requirements when it comes to approving loans in the past few months. 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. 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
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. 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.
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. 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.
