The average rate nationwide for a 15-year fixed-rate refinance increased over the last seven days, while 30-year fixed refinance rates went down. The average rates for 10-year fixed refinances saw an increase.
Like mortgage rates, refinance rates fluctuate on a daily basis. With inflation at a 40-year high, the Federal Reserve hiked the federal funds rate seven times in 2022. Though mortgage rates are not set by the central bank, its rate hikes increase the cost of borrowing money and eventually impact mortgage and refinance rates and the broader housing market. Whether refinance rates will continue to rise or fall in 2023 depends largely on how things play out with inflation: If it cools, rates will likely follow suit. But if it persists, refinance rates will continue their upward trajectory.
If rates for a refi are currently lower than your existing mortgage rate, you could save money by locking in a rate now. As always, consider your goals and circumstances, and compare rates and fees to find a mortgage lender who can meet your needs.
30-year fixed-rate refinance
The current average interest rate for a 30-year refinance is 6.42%, 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. If you’re having difficulties making your monthly payments currently, a 30-year refinance could be a good option for you. Be aware, though, that interest rates will typically be higher compared to a 10- or 15-year refinance, and you’ll pay off your loan at a slower rate.
15-year fixed-rate refinance
The average rate for a 15-year fixed refinance loan is currently 5.77%, an increase of 1 basis point compared to one week ago. With a 15-year fixed refinance, you’ll have a larger monthly payment than a 30-year loan. But you’ll save more money over time, because you’re paying off your loan quicker. 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
The average rate for a 10-year fixed refinance loan is currently 5.81%, an increase of 10 basis points compared to one week ago. Compared to a 15- or 30-year refinance, a 10-year refinance will usually have a lower interest rate but higher monthly payment. 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 interest rates hit a historic low. But they have been climbing, steadily, since early 2022. The Fed hiked rates dramatically throughout 2022 and it appears poised to continue with more increases in 2023. If inflation eases, however, rates could stabilize and even begin to decline this year.
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 supplied by lenders nationwide:
Average refinance interest rates
|A week ago
|30-year fixed refi
|15-year fixed refi
|10-year fixed refi
Rates as of Feb. 1, 2023.
How to find personalized refinance rates
It’s important to understand that the rates advertised online often require specific conditions for eligibility. Your interest rate will be influenced by market conditions as well as your specific credit history, financial profile and application.
Having a high credit score, a low credit utilization ratio and a history of consistent and on-time payments will generally help you get the best interest rates. You can get a good feel for average interest rates online, but make sure to speak with a mortgage professional in order to see the specific rates you qualify for. To get the best refinance rates, you’ll first want to make your application as strong as possible. The best way to improve your credit ratings is to get your finances in order, use credit responsibly and monitor your credit regularly. Don’t forget to speak with multiple lenders and shop around.
Refinancing can be a great move if you get a good rate or can pay off your loan sooner — but consider carefully whether it’s the right choice for you at the moment.
When to consider a mortgage refinance
Most people refinance because the market interest rates are lower than their current rates or because they want to change their loan term.When deciding whether to refinance, be sure to take into account other factors besides market interest rates, 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.
As interest rates increased throughout 2022, the pool of refinancing applicants contracted. If you bought your house when interest rates were lower than they are today, there may not be a financial benefit in refinancing your mortgage.