15-year and 30-year fixed refinancing saw their average rates fall. The average 10-year fixed refinancing rate also fell.
Like mortgage rates, refinance rates fluctuate daily. But rates have generally been rising since the start of 2022, and we expect this trend to continue through the end of this year. With inflation at its highest level in 40 years, the Federal Reserve has already raised interest rates three times and is on track to raise them again in 2022. Rate hikes increase the cost of borrowing, and homeowners considering refinancing may only find higher rates as the year goes on. If you’re looking to lower your monthly mortgage payment, it might be beneficial to lock in a rate sooner rather than later. Be sure to think about your goals and situation, and compare rates and fees to find a mortgage lender that can meet your needs.
30-year fixed rate refinancing
For 30-year fixed refinances, the average rate is currently 5.69%, down 4 basis points from 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. For this reason, a 30-year refinance can be a good idea if you’re having trouble making your monthly payments. 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
For 15-year fixed refinancing, the average rate is currently 4.93%, down 1 basis point from last week. A 15-year fixed refinance will most likely increase your monthly payment compared to a 30-year loan. On the other hand, you will save money on interest because you will pay off the loan sooner. 15-year refinance rates are generally lower than 30-year refinance rates, which will help you save even more in the long run.
10-year fixed rate refinancing
The current average interest rate for a 10-year refinance is 4.81%, down 11 basis points from a week ago. You’ll pay more each month with a 10-year fixed refinance compared to a 30- or 15-year refinance, but you’ll also get a lower interest rate. A 10-year refinance can help you pay off your home much faster and save on interest. Just be sure to carefully review your budget and current financial situation to make sure you can afford a higher monthly payment.
Where are the rates going
At the start of the pandemic, refinance rates fell to historic lows, but have mostly risen since the start of this year. Refinancing rates are rising due to inflation, which is at its highest level in four decades, as well as actions taken by the Federal Reserve. The Fed recently hiked interest rates by 0.75 percentage points — the biggest increase in nearly three decades — and plans to raise them multiple times throughout 2022 to slow the economy. That means it’s a good idea to take advantage of the refinance now and potentially lock in a decent rate before it goes up.
We track refinance rate trends using data collected by Bankrate, which is owned by CNET’s parent company. Here is a table with the average refinance rates reported by lenders across the country:
Average refinancing interest rate
|Product||Assess||A week ago||To change|
|30-year fixed refi||5.69%||5.73%||-0.04|
|15-year fixed refi||4.93%||4.94%||-0.01|
|10-year fixed refi||4.81%||4.92%||-0.11|
Rates as of July 18, 2022.
How to Shop for Refinance Rates
It is important to understand that prices advertised online may not apply to you. Your interest rate will be influenced by market conditions as well as your credit history and demand.
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. You can get a good idea of average interest rates online, but be sure to speak with a mortgage professional to see the specific rates you qualify for. To get the best refinance rates, you must first make your application as strong as possible. The best way to improve your credit rating is to get your finances in order, use your credit responsibly, and monitor your credit regularly. Remember to speak with several lenders and shop around.
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 right now.
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. When deciding to refinance, be sure to consider factors other than market interest rates, including how long you plan to stay in your current home, how long your loan term is, and the amount of your monthly payment. And don’t forget fees and closing costs, which can add up.
As interest rates have risen fairly steadily since the start of the year, the pool of people eligible for refinancing has shrunk considerably. If you bought your home when interest rates were lower than today, you probably won’t see any financial benefit from refinancing your mortgage.