Connect with us

rates

Today’s Mortgage Refinance Rates, May 9, 2022 | Rates Move Higher

Published

on

Today’s Mortgage Refinance Rates, May 9, 2022 | Rates Move Higher

Advertiser Disclosure

Jason Stauffer

Advertisement

Jason Stauffer

Staff Writer

Jason Stauffer is a journalist based in Chicago covering personal finance for NextAdvisor. His previous work includes…

Advertisement

May 9, 2022 | 7 Min Read

Shutterstock

Advertisement

We want to help you make more informed decisions. Some links on this page — clearly marked — may take you to a partner website and may result in us earning a referral commission. For more information, see How We Make Money.

Today, a few closely followed mortgage refinance rates went up.

Both the 15-year fixed and 30-year fixed saw their average rates climb. At the same time, average rates for 10-year fixed refinances also saw an increase.

As refinance rates climb higher, homeowners will want to take a closer look at the numbers before jumping into a refinance. Adding to the pressure rates have been under is the recent Federal Reserve decision to raise short-term rates again. The increase in May was 50 basis points and more increases are expected from the Fed this year.

Advertisement

For borrowers who were able to refinance to a near record-low interest rate within the last two years, it probably doesn’t make sense to refinance right now. The refinance rate you qualify for is determined by more than just market factors; your credit score and personal financial circumstances also play an important role. That means that if you’ve recently been able to dramatically improve your credit score, it may be worth at least getting a quote from a mortgage lender.

When refinancing you can negotiate not only the interest rate, but also the fees. It’s important to keep this at the top of your mind when choosing your mortgage lender.

Here’s where rates could be headed and what you need to know about it.

Refinance rates currently are:

Advertisement
  • 30-year mortgage refinance rate: 5.51%
  • Today, the average 15-year fixed refinance rate is 4.76%
  • Today, the average 10-year fixed refinance rate is 4.75%

Check out mortgage refinancing rates for your area here.

Refi Rate Forecast: What Determines Changes in Mortgage Rates?

This year we have seen a dramatic increase in mortgage rates, and some experts are forecasting a continued rise. One factor contributing to this is the Federal Reserve’s raising of short-term interest rates and the unwinding of its bond buying program.

Also leading to the increase in refi rates is inflation, which was the highest in 40 years coming in a 8.5% in March. Russia’s war in Ukraine has only added to the uncertainty and has potential to keep inflation rates elevated.

Another factor that could affect rates is COVID-19. While the Omicron variant has faded in much of the United States, a resurgence of the virus could affect markets. That’s nearly impossible to predict, and experts say it looms as a possible source of more volatility.

Does Refinancing Still Make Sense?

A rate and term refinance can save you money in the long run, but typically you’ll want the new rate to be at least 0.75% to 1% below your current rate. And the number of homeowners with rates well above the current market rates has dwindled dramatically as rates have risen.

Advertisement

There are alternatives to refinancing. With values rising in today’s housing market, homeowners may want to turn that value into cash. With rates where they are, a home equity line of credit (HELOC) may make sense for you because you won’t have to take out a new mortgage. A HELOC can be a reasonable option for financing home repairs or improvements, just be sure to understand all of the fine print regardless fees, the interest rate and the repayment schedule..

Why Is It Important to Look at the History of the 30-Year Fixed Mortgage Rate?

Although today’s refinance rates are near or above 5%, that is a typical interest rate historically. It might be a good idea to refinance if your current interest rate is higher than today’s rates.

This chart, which uses data from a survey by Freddie Mac that differs slightly but generally tracks with the Bankrate survey used by NextAdvisor. This graph offers a glimpse at how today’s rates compare with the past two decades. They’re up from the historically low years of 2020 and 2021, but they still aren’t absurdly high if you zoom out further.

Pro Tip: Refinance Closing Costs

You will pay upfront fees of 3% to 6% of your loan amount when you take out a new home loan. If you refinance, this is a significant expense you should take into account. Your monthly savings may not have exceeded the upfront fees if you refinance too often or sell your home soon after refinancing.

Advertisement

30-Year Refi Rates

Right now, the average 30-year fixed refinance has an interest rate of 5.51%, an increase of 9 basis points from a week ago.

You can use our mortgage calculator to determine how much your mortgage will cost you every month and find out how much less interest you’ll pay by making additional payments. Our mortgage calculator will also show you how much interest you’ll be charged over the entire loan term.

15-Year Fixed Refinance Rates

Right now, average 15-year fixed refinance rates are 4.76%, an increase of 7 basis points over the previous week.

Monthly payments on a 15-year refinance loan can be a considerable amount more than what you’d get with a 30-year mortgage. However, a shorter loan term can save you thousands of dollars interest over the life of the loan.

Advertisement

Average 10-Year Refinance Rates

The average 10-year, fixed refinance rate is 4.75%, an increase of 10 basis points from what we saw last week.

Monthly payments with a 10-year refinance term would cost even more than what you’d pay on a 15-year loan. The upside is you’d end up paying even less interest over the life of the loan.

How we calculate our refi rates

Our refinance interest rates are based Bankrate’s daily rate data, which is owned by the same parent company as NextAdvisor. These overnight refinance interest rate averages are based on a customer profile of the following:

  • Loan to value (LTV) or 80% or less
  • Owner occupied home
  • Credit score of 740+
  • Single-family detached home

The information provided to Bankrate from lenders across the country is displayed in the table below:

Rates as of May 9, 2022.

Advertisement

Take a look at mortgage refinance rates for a number of different loans.

Refinance Rate Frequently Asked Questions (FAQ):

Is Now Still a Good Time to Refinance?

The decision to refinance isn’t driven only by market factors such as interest rates or home values, your personal situation also matters. You’ll want to ask yourself if refinancing will help you accomplish your goals

Refinancing can be a good idea if you can cut your interest rate enough to offset the upfront closing costs. There are times, however, when the main reason for refinancing isn’t to secure a lower interest rate. Opening a home equity line of credit has grown in popularity recently as homeowners have decided to capitalize on increasing home values. If you’re going to open a home equity line of credit you’ll want to have a plan for the money beforehand. HELOCs have higher interest rates than mortgages and you’ll be increasing what you owe at the same time.

If it makes sense for your situation, now is still a good time to refinance your mortgage.

Advertisement

How to Qualify for the Best Refi Rate

Your finances have a big effect on the refinance rate you can qualify for. Having more equity in your home and a healthier credit score ordinarily will get you a better interest rate.

Your situation isn’t the only factor that impacts your interest rate. The equity you have in the property also comes into play. You want to have at least 20% equity, or a loan-to-value ratio of 80% or less.

Even the mortgage itself will impact what your refinance rate will be. A shorter-term refinance loan usually has better interest rates than mortgage refinance loans with longer repayment terms, all else equal. Also, if you want to turn your equity into cash with a cash-out refinance, you’ll be charged a higher interest rate, compared to other types of refinancing.

How Much Does It Cost to Refinance?

There are a handful of things to consider that influence the cost of refinancing, including:

Advertisement
  • Where the property is located
  • Type of the mortgage
  • Your lender
  • Loan balance
  • Credit score
  • The equity you have in the home

In general, refinance closing costs are 3% to 6% of the loan balance. Your state and local regulations can influence what fees and taxes you pay. Having more equity in the home and a higher credit score will make it easier to qualify for the refinance loan, secure a lower rate, and to get lenders to compete for your business.

Mortgage Rates by Loan Type

Mortgage Refi Rates

  • 30 Year Fixed Refinance Rates
  • 15 Year Fixed Refinance Rates
  • VA Refinance Rates
  • Jumbo Refinance Rates

Home Loan Interest Rates

  • 30 Year Fixed Mortgage Rates
  • 20 Year Fixed Mortgage Rates
  • 15 Year Fixed Mortgage Rates
  • 10 Year Fixed Mortgage Rates

Al,.k

}”?YJHxcdq5tr

Continue Reading
Advertisement
Click to comment

rates

Refi Rates Today, May 24, 2022 | Rates Stay Under 5.4%

Published

on

Refi Rates Today, May 24, 2022 | Rates Stay Under 5.4%

Advertiser Disclosure

Jason Stauffer

Advertisement

Jason Stauffer

Staff Writer

Jason Stauffer is a journalist based in Chicago covering personal finance for NextAdvisor. His previous work includes…

Advertisement

May 24, 2022 | 7 Min Read

Getty Images

Advertisement

We want to help you make more informed decisions. Some links on this page — clearly marked — may take you to a partner website and may result in us earning a referral commission. For more information, see How We Make Money.

In general, refinance rates for mortgage were varied with one notable rate increasing.

The average rate for a 15-year fixed refinance shrank, while 30-year fixed-rate refinances moved higher. The average rate on 10-year fixed refinance mortgages declined.

Refinance rates have spiked in the early part of this year and seem poised to continue their upward march. The Federal Reserve has already increased short-term rates twice this year, with more raises to come.

Advertisement

Right now, it’s as important as ever for homeowners to carefully consider whether or not now is the right time to refinance. With refi rates on the rise, the cost of borrowing is higher than it was a year ago. Keep in mind, when deciding to refinance there are other factors outside of just the rate to consider. The fees you pay to close a home loan matter, and can add up to thousands of dollars.

Here’s where refinance rates are today .

The average mortgage refinance rates are as follows:

  • The average 30-year fixed-rate refinance is 5.37%
  • Currently, the average 15-year fixed-rate refinance is 4.65%
  • Currently, the average 10-year fixed-rate refinance is 4.60%

Compare refinance rates for a wide range of different loans here.

Refinance Rate Forecast: What Is Driving Mortgage Rate Change?

Per the latest Consumer Price Index (CPI), annual inflation dipping slightly in April to 8.3%. This still puts it on par with the 40-year highs we’ve seen in the past few months. And that means refi rates are likely to see more increases as long as inflation remains high.

Advertisement

In response to high inflation that has lasted longer than initially anticipated, the Federal Reserve has begun increasing interest rates. Adding to the issue is Russia’s invasion of Ukraine and China’s COVID-19 lockdowns. Both of these geopolitical events threaten to compound existing supply chain issues and add to inflation. And we haven’t even started to feel these supply shocks, “it’s going to take months for those disruptions to seep fully into the supply chain,” Lindsey Piegza, chief economist at Stifel Financial told NextAdvisor.

Because of all of this, we could be stuck with high inflation for much longer than we want, which makes it more likely that the Fed will have to raise interest rates aggressively.

Does Refinancing Still Make Sense?

Generally speaking, homeowners could save thousands with a rate and term refinance if their new rate is 0.75% to 1% below their current rate. And the number of homeowners with rates well above the current market rates has dwindled dramatically as rates have risen.

In this hot housing market, the ability to turn the equity in your home into cash with a home equity line of credit (HELOC) has become increasingly popular. For those wanting to consolidate high-interest debt or make much needed home repairs or upgrades, a HELOC could make sense. If you go that route, you’ll want to understand the repayment schedule, interest rate and fees because they could differ from a traditional mortgage.

Advertisement

Why Is It Important to Look at the History of the 30-Year Fixed Mortgage Rate?

Although today’s refinance rates are near or above 5%, that is a typical interest rate historically. It might be a good idea to refinance if your current interest rate is higher than today’s rates.

This chart, which uses data from a survey by Freddie Mac that differs slightly but generally tracks with the Bankrate survey used by NextAdvisor. This graph offers a glimpse at how today’s rates compare with the past two decades. They’re up from the historically low years of 2020 and 2021, but they still aren’t absurdly high if you zoom out further.

Pro Tip: What to Know About Refinance Fees

When you take out a new home loan, you’ll pay upfront fees totaling 3% to 6% of the loan amount. It is a significant expense that needs to be taken into account in the refinancing process. Your monthly savings may not have exceeded the upfront fees if you refinance too often or sell your home soon after refinancing.

30-Year Fixed Refi Rates

Right now, the average 30-year fixed refinance has an interest rate of 5.37%, an increase of 2 basis points from a week ago.

Advertisement

You can use our mortgage calculator to determine how much your mortgage will cost you every month and to understand how paying more each month will impact your mortgage. Our mortgage calculator will also show you how much interest you’ll be charged over the entire loan term.

15-Year Refinance Rates

Currently, the average rate for a 15-year fixed refinance loan is 4.65%, a decrease of 8 basis points from what we saw last week.

Monthly payments on a 15-year refinance loan will be bigger compared to a 30-year refinance at the same rate. However, a shorter loan term can help you build up equity in your home much more quickly.

10-Year Fixed Refi Rates

The average 10-year, fixed refinance rate is 4.60%, a decrease of 9 basis points from the rate observed over the previous week.

Advertisement

Monthly payments with a 10-year refinance term would cost a significant amount more per month than you would with a 15-year term, but you’ll pay less interest in the long term.

How we calculate our refinance rates

The table below shows where refinance rates were headed in the last week.

These daily refinance rates are provided by Bankrate. The information is based on homeowners that meet specific criteria, such as a credit score of 740+ with a loan-to-value ratio of 80% or better. If your personal situation doesn’t meet or exceed the standards of this survey, then it’s likely you’ll end up with a refi rate higher than what’s listed..

Bankrate is owned by Red Ventures, Nextadvisor’s parent company.

Advertisement

Rates as of May 24, 2022.

Take a look at mortgage refinance rates for a number of different loans.

Refinance Rate Frequently Asked Questions (FAQ):

Is It Still a Good Time to Refinance?

Refinancing isn’t solely dependent on the numbers, like the refinance rate, your situation is also a big factor. Consider whether or not refinancing fits into your life plans and financial desires

One rule of thumb is that refinancing makes sense if you can reduce your interest rate by 1% or more. However, there are times when securing a lower interest rate isn’t the main driver behind the decision to refinance. Opening a home equity line of credit has grown in popularity recently as homeowners have decided to capitalize on increasing home values. Home equity lines of credit typically have higher rates compare to other options, but it can be a good way to pay for home upgrades or to pay off other higher interest debt.

Advertisement

As long as refinancing aligns with your financial goals and gets you closer to achieving them, then now is a good time to refinance.

How to Ensure You Get the Lowest Refinance Rate

Mortgage refinance rates vary depending on your personal financial situation. If you have a higher credit score and better loan-to-value (LTV) ratios will typically receive a greater discount on their refinance rate.

Your situation isn’t the only factor that impacts your refinance rate. A lower loan-to-value ratio (LTV) can help you qualify for a reduced refinance rate. So the more equity you’ve built up, the better. Having at least 20% equity in your property is ideal.

The type of mortgage loan has an affect on what your mortgage refinance rate will be. A shorter-term refinance loan usually has lower interest rates than a longer-term loan. The type of mortgage refinance you need makes a difference in the refinance interest rate. A cash-out refinance loan usually comes with a higher mortgage refinance rate than other types of home loan refinancing.

Advertisement

What Is the Average Cost of Refinancing?

What you’ll pay to refinance your mortgage can vary widely depending on these factors:

  • Where you live
  • Type of the mortgage
  • What lender you choose
  • Size of loan
  • Your credit score
  • Home’s equity

In general, refinance closing costs are 3% to 6% of the loan balance. Your state and local regulations can influence what fees and taxes you pay. Having more equity in the home and a higher credit score will make it easier to qualify for the refinance loan, secure a lower rate, and to get lenders to compete for your business.

Mortgage Interest Rates by Loan Type

Mortgage Refi Rates

  • 30 Year Fixed Refinance Rates
  • 15 Year Fixed Refinance Rates
  • VA Refinance Rates
  • Jumbo Refinance Rates

Home Loan Interest Rates

  • 30 Year Fixed Mortgage Rates
  • 20 Year Fixed Mortgage Rates
  • 15 Year Fixed Mortgage Rates
  • 10 Year Fixed Mortgage Rates

Al,.k

}”?YJHxcdq5tr

Continue Reading

rates

Today’s Mortgage And Refinance Rates, May 24, 2022 | Rates Hover Below 5.4%

Published

on

Today’s Mortgage And Refinance Rates, May 24, 2022 | Rates Hover Below 5.4%

Advertiser Disclosure

Jason Stauffer

Advertisement

Jason Stauffer

Staff Writer

Jason Stauffer is a journalist based in Chicago covering personal finance for NextAdvisor. His previous work includes…

Advertisement

May 24, 2022 | 6 Min Read

We want to help you make more informed decisions. Some links on this page — clearly marked — may take you to a partner website and may result in us earning a referral commission. For more information, see How We Make Money.

What we’re seeing today is a number of important mortgage rates have dropped off. Both 30-year fixed and 15-year fixed mortgage rates moved down. We also saw an uptick in the average rate of 5/1 adjustable-rate mortgages (ARM).

Advertisement

As the latest inflation data for April suggest, perhaps we have reached a high point, the annual inflation rate fell to 8.3%. However, there are a number of geopolitical events that pose an ongoing threat to global supply chains, which could push inflation up.

Inflation is expected to drive up mortgage rates as long as it remains high. One of the main reasons for this, it that the Federal Reserve fights inflation by raising short-term interest rates. Therefore, mortgage rates are likely to rise.

Rising rates only further decrease affordability for homebuyers facing inventory shortages. Having said that, it is still possible for you to become a homeowner right now, if you are patient and know how much house you can afford.

Let’s check out the current rate trends and learn more about navigating today’s market.

Advertisement

The averages for 30-year fixed, 15-year fixed, and 5/1 ARMs are:

  • 30-year fixed mortgage rates are averaging 5.38%
  • The average 20-year fixed-rate mortgage currently sits at 5.44%
  • 15-year mortgage rate: 4.67%
  • 10-year mortgage rate: 4.61%
  • 5/1 ARM rate: 3.92%

Mortgage Rate Trends: Why Are Mortgage Rates Spiking?

When the pandemic hit, rates initially fell when economic activity slowed. However, as the pandemic progressed we began to experience supply chain shortages, which drove inflation, and interest rates, higher.

We are currently facing a situation similar to this one, where the very issues behind the high inflation could slow economic growth in the future. A sagging economy typically goes hand in hand with lower mortgage rates.

What will actually happen with mortgage rates is anyones guess, but at the moment most experts believe rates won’t drop. The impact of the Russian invasion of Ukraine and the Chinese COVID lockdown on supply chains will likely lead to higher inflation.

Until inflation declines, it is unlikely that we will return to the days of low mortgage rates. “Until inflation is under control, the risk is certainly that rates move higher,” Danielle Hale, chief economist at Realtor.com told NextAdvisor.

Advertisement

Are Current Mortgage Rates Good For Buying a Home Right Now?

Homebuyers are facing high prices and rising interest rates, a combination that can quickly reduce one’s purchasing power.

However, that does not mean that now is the worst time to buy a house. Beware of rushing into a home purchase if you fear that rates or prices will continuously rise. You should instead take the time to find the right home for you at an affordable price if now is a good time for you to buy.

Owning a home is a better choice if you plan on staying for a long time. This way you can weather the inevitable ups and downs of the market. When purchasing a home, stick to your budget and only purchase what you can comfortably afford. According to experts, you shouldn’t spend more than 28% of your pretax income on housing.

Why Is It Important to Look at the History of the 30-Year Fixed Mortgage Rate?

It wasn’t that long ago that a “good” rate was around 5%, which is about where rates are today. That said, today’s interest rates don’t have to be a barrier to homeownership.

Advertisement

This chart uses data compiled by Freddie Mac. It’s slightly different than the Bankrate data but provides a good historical context for today’s mortgage interest rates.

Pay Attention to Loan Fees

Anytime you take out a mortgage, your decision should factor in the loan’s closing costs. The closing costs can be anywhere from 3-6% of the loan amount, including origination fees, prepaid interest, and property taxes.. Choosing a higher interest rate in exchange for lender credit can reduce your upfront costs. The strategy can save you money in the short-term, so it’s worth considering if you plan to sell or refinance your home within five to eight years.

Current Mortgage Refinance Rates

In a surprising move, the mean rate for a 30-year fixed refinance advanced, while 15-year Refinance rates decreased. If you’ve been considering a 10-year refinance loan, just know average rates went down.

Take a look at today’s refinance rates:

Advertisement
  • The average 30-year fixed-rate refinance currently sits at: 5.37%
  • 20-year fixed refinance rate: 5.39%
  • 15-year fixed refinance rates are averaging 4.65%
  • 10-year fixed-rate refinance: 4.60%

Find current mortgage rates for today.

30-Year Fixed Mortgage Interest Rates

The 30-year fixed-mortgage rate average is 5.38%, which is a decline of 4 basis points from the previous week.

15-Year Fixed Mortgage Interest Rates

The median rate for a 15-year fixed mortgage is 4.67%, which is a decrease of 10 basis points from the same time last week.

A 15-year, fixed-rate mortgage’s monthly payment is, undeniably, a much bigger monthly payment than what you’d get with a 30-year mortgage offering the same interest rate. But, 15-year loans have some considerable benefits: You’ll save thousands of dollars in interest and pay off your loan much faster.

5/1 Adjustable-Rate Mortgage Rates

A 5/1 ARM has an average rate of 3.92%, which is an addition of 8 basis points compared to a week ago.

Advertisement

An adjustable-rate mortgage is ideal for borrowers who will sell or refinance before the rate changes. If that’s not the case, their interest rates could end up being noticeably higher after a rate adjusts.

For the first five years, a 5/1 ARM will typically have a lower interest rate compared to a 30-year fixed mortgage. Keep in mind that your rate could climb higher and your payment might grow by hundreds of dollars a month.

How Our Mortgage Interest Rates Are Calculated

To get an idea of where mortgage rate may move, we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. The daily rates survey focuses on home loans where the borrower has a 740+ FICO score, a LTV of 80% or lower, and the home is occupied by the owner.

The mortgage interest rate data listed below and based on the Bankrate mortgage rate survey:

Advertisement

Rates accurate as of May 24, 2022.

Pro Tip

Plug and play your desired mortgage interest rate and the rest of your loan details into our mortgage calculator to see an estimated monthly payment.

Mortgage Rate Frequently Asked Questions (FAQ):

How Do I Qualify for the Lowest Mortgage Rate?

Shopping around for a home loan is a great way to secure the lowest mortgage interest rate.

The mortgage rate you get depends on a variety of factors lenders consider when assessing how the likelihood that you’ll be able to make your mortgage payments for the long term. Your credit score factors into the decision. And your loan-to-value (LTV) ratio matters, so having a bigger down payment is better for your mortgage rate.

Advertisement

But lenders will evaluate your situation differently. So you can provide the same documentation to three different banks, and receive mortgage offers with vastly different rates and fees.

Is It a Good Idea to Lock in My Mortgage Rate Right Now?

Mortgage rates move up and down on a daily basis, and it’s impossible to time the market. So locking in your interest rate right now is a good idea because overall, rates are historically favorable.

When you lock in your rate, ask your lender how long the lock is valid for. A rate lock can be good for anywhere from 30 to 60 days, which typically will give you enough time to close before the lock expires. If you want to extend the rate lock, ask about fees as many lenders charge a fee for extending a rate lock.

Advertisement
Continue Reading

rates

Refi Rates Today, May 23, 2022 | Rates Dip

Published

on

Refi Rates Today, May 23, 2022 | Rates Dip

Advertiser Disclosure

Jason Stauffer

Advertisement

Jason Stauffer

Staff Writer

Jason Stauffer is a journalist based in Chicago covering personal finance for NextAdvisor. His previous work includes…

Advertisement

May 23, 2022 | 7 Min Read

Getty Images

Advertisement

We want to help you make more informed decisions. Some links on this page — clearly marked — may take you to a partner website and may result in us earning a referral commission. For more information, see How We Make Money.

Today, numerous closely followed refinance rates dropped off.

Both the 15-year fixed and 30-year fixed saw their average rates go down. The average rate on 10-year fixed refinance mortgages also trailed off.

As of early this year, refinance rates spiked and appear likely to continue on their upward trajectory. The Federal Reserve has already increased short-term rates twice this year, with more raises to come.

Advertisement

In the current financial climate, homeowners should carefully consider whether it’s the right time to refinance. Simply put, the cost of refinancing is increasing because rates are higher. That said, interest rates aren’t the only thing to concentrate on. Closing costs on a refinance loan can add up to thousands of dollars, greatly increasing your upfront costs.

Here’s where refinance rates are today .

Take a look at today’s refinance rates:

  • Today, the average 30-year fixed refinance rate is 5.31%
  • The average 15-year fixed refinance rates is 4.65%
  • 10-year mortgage refinance rate: 4.61%

Compare refinance rates for a wide range of different loans here.

Refi Rate Forecast: What Determines Changes in Mortgage Rates?

The annual inflation rate came in it at 8.3% in April, according to the data from the Bureau of Labor Statistics. The price still stands on par with the 40-year inflation highs of recent months. And that’s bad news for refinance rates.

Advertisement

As inflation lingers longer than anticipated, the Federal Reserve has begun raising interest rates. On top of that, there is more trouble brewing for the global supply chain. Russia’s invasion of Ukraine and China’s latest round of COVID lockdowns threaten to add to the rising inflation we are currently experiencing. And the impact these events have on inflation may not be felt right away. “The pain of the April and March lockdown is not yet fully being felt in the manufacturing sector outside of China,” Lindsey Piegza, chief economist at Stifel Financial told NextAdvisor.

Because of all of this, we could be stuck with high inflation for much longer than we want, which makes it more likely that the Fed will have to raise interest rates aggressively.

Does Refinancing Still Make Sense?

As a rule of thumb, refinancing can save you money if you can secure an interest rate that’s around 1% lower than your existing rate. That said, the recent spike in refinance rates has drastically reduced the number of homeowners with interest rates that are well above today’s average rates.

There are alternatives to refinancing. With values rising in today’s housing market, homeowners may want to turn that value into cash. With rates where they are, a home equity line of credit (HELOC) may make sense for you because you won’t have to take out a new mortgage. For those wanting to consolidate high-interest debt or make much needed home repairs or upgrades, a HELOC could make sense. If you go that route, you’ll want to understand the repayment schedule, interest rate and fees because they could differ from a traditional mortgage.

Advertisement

History of the 30-Year Fixed Mortgage Rate

Even with refi rates climbing higher than they have been in recent history, they still fall within normal historical trends. However, refinancing is still a viable option when your existing rate is significantly higher than the prevailing rates.

The historical rate trends shown in this chart reference data complied by Freddie Mac. NextAdvisor typically uses rate information collected by Bankrate. Although these mortgage rate surveys differ, they tend to show the same trends.

Pro Tip: What to Know About Refinance Fees

For a new mortgage, you will have to pay upfront fees totaling 3% to 6% of the loan amount. This is a significant expense that needs to be considered when refinancing. Refinancing often or selling a house soon after refinancing can result in your monthly savings not exceeding the fees you paid.

30-Year Fixed Refinance Rates

Right now, the average 30-year fixed refinance has an interest rate of 5.31%, a decrease of 4 basis points from a week ago.

Advertisement

You can use our mortgage calculator to price out your monthly mortgage payments and to understand how much you could save if you made extra payments. Our mortgage calculator will also show you how much interest you’ll be charged over the entire loan term.

15-Year Fixed Refi Rates

Currently, the average rate for a 15-year fixed refinance loan is 4.65%, a decrease of 10 basis points from what we saw last week.

Monthly payments on a 15-year refinance loan will be bigger compared to a 30-year refinance at the same rate. However, a shorter loan term can help you build up equity in your home much more quickly.

Average 10-Year Refinance Rates

The average 10-year, fixed refinance rate is 4.61%, a decrease of 1 basis points from the rate observed over the previous week.

Advertisement

Monthly payments with a 10-year refinance term would cost a lot more per month than you would with a 15-year term, but you’ll pay less interest in the long term.

How our refi rates are calculated

Our daily refinance rates are based Bankrate’s daily rate data, which is owned by the same parent company as NextAdvisor. These daily refinance interest rate averages are based on a consumer profile that meets these qualifications:

  • At least 20%+ equity
  • Primary residence
  • FICO score 740+
  • Single-family detached home

The information supplied to Bankrate from lenders across the country is displayed in the table below:

Rates as of May 23, 2022.

Take a look at mortgage refinance rates for a number of different loans.

Advertisement

Refinance Rate Frequently Asked Questions (FAQ):

Does Refinancing Still Make Sense?

While refinance rates are higher than recent record lows, they are still exceptionally low. The current time could still be the right time to refinance if you want to lower your mortgage payment by refinancing to a lower rate.

When deciding whether to refinance, interest rates are not the only factor to consider. You’ll also need to weigh how long you have left to pay off your current mortgage and to consider the repayment term of a new home loan. Those who have been paying on their current mortgage for 10 years may want to refinance to a 20 year loan so that they aren’t adding more years to the loan’s back end. If you opt for a shorter-term refinance, the trade off is that your monthly payment will be higher than with a longer loan.

Before you jump on an exceptionally low refinance rate, be sure that the overall deal makes sense for you.

How to Qualify for the Best Refi Rate

Your finances have a big effect on the refinance rate you’ll be able to secure. Having a lower loan-to-value ratio for your home and a better credit score ordinarily translates into a lower refinance rate.

Advertisement

But your personal financial situation isn’t the only thing that will impact your refinance interest rate. The equity you have in the property also comes into play. Having at least 20% equity in your property is ideal.

The type of mortgage loan will impact your refinance rate. A loan with a shorter repayment term generally has better interest rates than a loan with longer terms. Also, if you want to pull cash out of your home with a cash-out refinance, you’ll be charged a higher interest rate, compared to other types of refinancing.

What Is the Average Cost of Refinancing?

Refinancing a mortgage typically involves paying closing costs of 3% to 6% of the loan amount. For example, if you have a $300,000 mortgage, you can expect to pay between $9,000 and $18,000 in closing costs.

But, each lender will assess your personal situation differently. So it’s important to shop around and compare offers. Everything from where the property is located to the type of loan you’re refinancing into can change what you’ll pay to refinance.

Advertisement

Mortgage Interest Rates by Loan Type

Mortgage Refinance Rates

  • 30 Year Fixed Refinance Rates
  • 15 Year Fixed Refinance Rates
  • VA Refinance Rates
  • Jumbo Refinance Rates

Home Loan Rates

  • 30 Year Fixed Mortgage Rates
  • 20 Year Fixed Mortgage Rates
  • 15 Year Fixed Mortgage Rates
  • 10 Year Fixed Mortgage Rates

Al,.k

}”?YJHxcdq5tr

Continue Reading

Trending