Several closely watched mortgage refinance rates rose today. 15-year and 30-year fixed refinancing saw their average rates rise. At the same time, average 10-year fixed refinancing rates also increased.
Homeowners can expect to see refinance rates increase over the course of this year. Although rates are higher today than at the start of the pandemic, multiple economic factors are expected to continue pushing rates higher. Refinance rates also fluctuate daily, but if you’re looking to lower the dollars and interest from your current monthly mortgage payments, these could be the lowest rates this year. Be sure to think about your goals and situation, and compare offers to find a lender who can meet your needs.
30-year fixed rate refinancing
For 30-year fixed refinances, the average rate is currently 5.06%, an increase of 18 basis points compared to the same period last week. (One basis point equals 0.01%.) A 30-year fixed refinance will generally have lower monthly payments than a 15- or 10-year refinance. If you’re currently having trouble making your monthly payments, a 30-year refinance might be a good option for you. In exchange for the lower monthly payments, the rates on a 30-year refinance will generally be higher than the rates on a 15- and 10-year refinance. You will also repay your loan more slowly.
15-year fixed-rate refinancing
The average 15-year fixed refinance rate is currently 4.23%, up 14 basis points from a week ago. Refinancing a 15-year fixed loan from a 30-year fixed loan will likely increase your monthly payment. On the other hand, you will save money on interest because you will pay off the loan sooner. Interest rates for a 15-year refinance also tend to be lower than a 30-year refinance, so you’ll save even more in the long run.
10-year fixed rate refinancing
The current average interest rate for a 10-year refinance is 4.25%, an increase of 26 basis points from a week ago. A 10-year refinance will typically have the highest monthly payment of any refinance term, but the lowest interest rate. A 10-year refinance can be a great deal because paying off your home sooner will help you save on long-term interest. But you need to confirm that you can afford a higher monthly payment by evaluating your budget and your overall financial situation.
Where are the rates going
Interest rates are expected to rise this year as the Federal Reserve recently hiked rates for the first time since 2018 and plans to raise them multiple times in 2022. During the pandemic, refinance rates have fallen to historic lows, but given factors such as Federal Reserve policy, strong economic growth and inflation – which is at its highest level in four decades – we now see interest rates approaching pre-pandemic levels. While the war in Ukraine has caused temporary interest rate cuts, it is impossible to predict when another cut might occur. This means it’s a good idea to try to take advantage of the refinance now and lock in a decent rate.
We track refinance rate trends using information collected by Bankrate, which is owned by CNET’s parent company. Here is a chart with the average refinance rates reported by lenders nationwide:
Average refinancing interest rate
|Product||Rate||A week ago||Switch|
|30-year fixed refi||5.06%||4.88%||+0.18|
|15-year fixed refi||4.23%||4.09%||+0.14|
|10-year fixed refi||4.25%||3.99%||+0.26|
Rates as of April 8, 2022.
How to Shop for Refinance Rates
It is important to understand that prices advertised online may not apply to you. Market conditions are not the only factor in interest rates; your particular application and your credit history will also play an important role.
Having a high credit score, a low rate of credit utilization, and a history of regular, 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 contact a mortgage professional to get your exact refinance rate. Also, don’t forget to factor in potential fees and closing costs.
You should also be aware that many lenders have had stricter loan approval requirements in recent months. As such, you can’t qualify for a refinance – or a low rate – if you don’t have a strong credit rating.
To get the best refinance rates, you must first make your application as strong as possible. You can do this by monitoring your credit, getting into debt responsibly, and getting your finances in order before applying for a refinance. Remember to speak with several lenders and shop around for the best rate.
Is it the right time to refinance?
For a refinance to make sense, you’ll generally want to get an interest rate that’s lower than your current rate. Besides interest rates, changing the term of your loan is another reason to refinance. It is true that over the past year, interest rates have reached a historic low. But when deciding to refinance, be sure to consider factors other than market interest rates.
Refinancing may not always make financial sense. Consider your personal goals and financial situation. How long do you plan to stay at home? Are you refinancing to lower your monthly payment, pay off your home sooner – or for a combination of reasons? Also keep in mind that closing costs and other fees may require an upfront investment.
Note that some lenders have tightened their requirements since the start of the pandemic. If you don’t have a good credit score, you may not qualify for the best rate. Refinancing can be a great decision if you get a good rate or can pay off your loan sooner, but think carefully if it’s the right choice for you.