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The rate on a 30-year fixed refinance decreased to 7.05% today, according to the Mortgage Research Center. For 15-year fixed refinance mortgages, the average rate is 6.02%, and for 20-year mortgages, the average is 6.88%.
Related: Compare Current Refinance Rates
30-Year Fixed-Rate Mortgage Refinance Rates
At 7.05%, the average rate on a 30-year fixed-rate mortgage refinance is up 0.33 point from this time last week.
The APR, or annual percentage rate, on a 30-year fixed is 7.08%. This time last week, it was 6.76%. The APR is the all-in cost of your loan.
At the current interest rate of 7.05%, borrowers with a 30-year fixed-rate refinance mortgage of $100,000 will pay $669 per month in principal and interest (taxes and fees not included), the Forbes Advisor mortgage calculator shows. You’d pay approximately $141,495 in total interest over the life of the loan.
20-Year Fixed-Rate Mortgage Refinance Rates
The 20-year fixed mortgage refinance average rate stands at 6.88%, versus 6.42% last week.
The APR, or annual percentage rate, on a 20-year fixed mortgage is 6.93%. It was 6.47% last week.
At the current interest rate, a 20-year, fixed-rate mortgage refinance of $100,000 would cost $768 per month in principal and interest. That doesn’t include taxes and fees. That borrower would pay roughly $85,022 in total interest over the life of the loan.
15-Year Fixed-Rate Mortgage Refinance Rates
The average interest rate on the 15-year fixed refinance mortgage is 6.02%. Last week, the 15-year fixed-rate mortgage was at 5.6%.
The annual percentage rate on a 15-year fixed is 6.07%. Last week, it was 5.65%.
At the current interest rate, you would pay $845 per month in principal and interest for every $100,000 borrowed. Over the life of the loan, you would pay $52,586 in total interest.
30-Year Jumbo Mortgage Refinance Rates
The average interest rate for a 30-year, fixed-rate jumbo mortgage refinance (a loan above the federal conforming loan limit of $806,500 in most places) jumped up week-over-week to 7.49%, versus 7.18% last week.
At today’s interest rate on a 30-year, fixed-rate jumbo mortgage refinance, a borrower would pay $699 per month in principal and interest on a $100,000 loan.
15-Year Jumbo Mortgage Refinance Rates
A 15-year, fixed-rate jumbo mortgage refinance is 6.88% on average, up 0.78 point from last week.
At today’s interest rate, a borrower with a 15-year, fixed-rate jumbo refinance would pay $892 per month in principal and interest per $100,000 borrowed. Over the life of the loan, that borrower would pay around $60,885 in total interest.
Are Refinance Rates and Mortgage Rates the Same?
No, mortgage refinance rates are typically higher than purchase loan rates due to additional risk for the lender. Cash-out refinance rates are also higher than a standard rate-and-term refinance as you are increasing your loan balance by tapping your equity.
The application process for refinancing a mortgage is similar to getting a home purchase loan regarding the required paperwork and home appraisal. Additionally, similar closing costs from 2% to 6% of the loan amount apply, which is an extra expense.
When you refinance, your new rate is based on current refinance rates and your loan term. This rate replaces your existing mortgage repayment terms.
Know When To Refinance Your Home
Refinancing your mortgage can be a wise move for many reasons, most notably lowering your interest rate or your monthly payments. It can also help you pay down your mortgage sooner, access your home’s equity or get rid of private mortgage insurance (PMI).
But there are closing costs associated with refinancing, so it probably makes more sense to refinance if you know you’ll be keeping your home for some time. You can determine the “break-even point” for a potential refinance, or how long it will take for savings from a new mortgage to surpass any closing costs. Find out what those costs will be and divide them by the monthly savings you’ll realize with the new mortgage.
The Forbes Advisor mortgage refinance calculator can help you run the numbers to see if it’s a good time for you to refinance.
Is Now a Good Time To Refinance?
Consider refinancing your mortgage when you need a more affordable monthly payment, want to stop paying annual FHA or USDA loan fees or would prefer a fixed interest rate. You may also consider a cash-out refinance to borrow from your home equity.
However, as refinance rates have increased by several percentage points from near-term lows in late 2021, it can be harder to replace your existing interest rate with a lower one, unless you refinance to a 15-year mortgage. As a result, extending your loan term is the one way to reduce your payment, but you can end up paying more total interest.
The application process is similar to buying a home. Plus, home appraisal fees and closing costs from 2% to 6% of the loan amount apply and add to your lifetime borrowing costs.
How To Get Today’s Best Refinance Rates
Just like when you took out your original mortgage, it pays to have a strategy for finding the lowest rate when you want to refinance. Here’s what you should be doing get a good mortgage rate:
- Improve your credit
- Consider a shorter loan term
- Lower your debt-to-income ratio
- Watch mortgage rates
There are no guarantees when it comes to borrowing, but a strong credit score is one of the best things you can do to present yourself to lenders. Banks and other financial institutions are more likely to approve you if you don’t have too much debt relative to your income. You should check in on mortgage rates, which fluctuate frequently, on a regular basis. And use calculators like ours to see if you can swing a home loan that’s shorter in duration than the popular 30-year mortgage. These loans usually have lower interest rates.
Frequently Asked Questions (FAQs)
How quickly can you refinance a mortgage?
You can usually refinance a mortgage in as quickly as 45 to 60 days, but it depends on many factors – like the type of home loan you choose. Always check with your lender before committing to borrow.
How do you find the best refinancing lender?
You should always shop around when you’re trying to get a new mortgage or refinance an existing one. Take a look at the best mortgage refinance lenders as a starting point and try applying online. Always find out the closing costs each lender will charge, and make sure you’re able to communicate well with the lender you want to choose. In a bumpy housing market, you’ll probably be in touch with the lender more often than you realize.
How much does it cost to refinance a mortgage?
Closing costs for a refinance can be anywhere from 2% to 6% of the cost of the loan. It’s always a good idea to ask the lender what kind of closing costs they’ll charge before you decide to borrow from them.