Multiple closely followed mortgage refinance rates kept ticking up today. There was a huge increase in the average interest rates for 30-year fixed-rate refinances, 15-year fixed refinances and 10-year fixed refinances.
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 5.89%, an increase of 38 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
The average rate for a 15-year fixed refinance loan is currently 5.05%, an increase of 34 basis points from what we saw the previous week. A 15-year fixed refinance will most likely raise your monthly payment compared to 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 5.05%, an increase of 39 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. However, you should analyze your budget and current financial situation to make sure you'll be able to afford the 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 data collected by Bankrate, which is owned by CNET's parent company. Here's a table with the average refinance rates provided by lenders nationwide:
Average refinance interest rates
|Product||Rate||A week ago||Change|
|30-year fixed refi||5.89%||5.51%||+0.38|
|15-year fixed refi||5.05%||4.71%||+0.34|
|10-year fixed refi||5.05%||4.66%||+0.39|
Rates as of June 14, 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. 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. 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.
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. Don't forget to speak with multiple lenders and shop around to find the best rate.
When should I 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. Interest rates in the past few months have been at historic lows, but that's not the only thing you should be looking at when deciding whether to refinance.
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.
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.