Multiple closely followed refinance rates receded today. Both 15-year fixed and 30-year fixed refinances saw their average rates recede. At the same time, average rates for 10-year fixed refinances also declined.
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 average rate for a 30-year fixed refinance loan is currently 5.22%, a decrease of 15 basis points over this time last week. (A basis point is equivalent to 0.01%.) A 30-year fixed refinance will typically have lower monthly payments than a 15-year or 10-year refinance. 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 4.53%, a decrease of 12 basis points over last week. With a 15-year fixed refinance, you'll have a larger monthly payment than a 30-year loan. On the other hand, you'll save money on interest, since you'll pay off the loan sooner. 15-year refinance rates are typically lower than 30-year refinance rates, which will 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 4.51%, a decrease of 9 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 be a good deal, since paying off your house sooner will help you 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
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 information collected by Bankrate, which is owned by CNET's parent company. Here's a table with the average refinance rates provided by lenders across the US:
Average refinance interest rates
|Product||Rate||A week ago||Change|
|30-year fixed refinance||5.22%||5.37%||-0.15|
|15-year fixed refinance||4.53%||4.65%||-0.12|
|10-year fixed refinance||4.51%||4.60%||-0.09|
Rates as of May 31, 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. Market conditions aren't the only factor in interest rates; your particular application and credit history will also play a large role.
Generally, you'll want a high credit score, low credit utilization ratio, and a history of making consistent and on-time payments in order to get the best interest rates. To get your personalized refinance rates, you'll need to speak with a mortgage professional, as the rates you qualify for may differ from the rates advertised online. Also remember to account for potential fees and closing costs.
It's also worth noting that in recent months, lenders have been stricter with their requirements. As such, you may not qualify for a refinance -- or a low rate -- if you don't have a solid credit rating.
Before applying for a refinance, you should make your application as strong as possible in order to get the best rates available. The best way to improve your credit ratings is to get your finances in order, use credit responsibly, and monitor your credit regularly. You should also shop around with multiple lenders and compare offers to make sure you're getting the best rate.
Is now a good time to refinance?
In order for a refinance to make sense, you'll generally want to get a lower interest rate than your current rate. Aside from interest rates, changing your loan term is another reason to refinance. 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.
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? Also keep in mind that closing costs and other fees may require an upfront investment.
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. 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.