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The rate on a 30-year fixed refinance climbed to 6.72% today, according to the Mortgage Research Center. The average rate on a 15-year mortgage refinance is 5.6%. On a 20-year mortgage refinance, the average rate is 6.42%.
Related: Compare Current Refinance Rates
30-Year Fixed-Rate Mortgage Refinance Rates
Currently, the average rate for a 30-year, fixed-rate mortgage refinance is 6.72%, down 0.03 point from a week ago. Borrowers with a 30-year, fixed-rate mortgage of $100,000 will pay $647 per month for principal and interest at the current interest rate, according to the Forbes Advisor mortgage calculator, not including taxes and fees. Over the life of the loan, the borrower will pay total interest costs of about $133,615.
Another way of looking at loan costs is the annual percentage rate, or APR. For a 30-year, fixed-rate mortgage, the APR is 6.76%, lower than last week’s 6.78%. The APR is essentially the all-in cost of the home loan.
20-Year Fixed-Rate Mortgage Refinance Rates
For a 20-year fixed refinance mortgage, the average interest rate is currently 6.42%, compared to 6.51% last week.
The APR, or annual percentage rate, on a 20-year fixed mortgage is 6.47%. It was 6.55% last week.
At today’s interest rate, a 20-year, fixed-rate mortgage refinance of $100,000 would cost $741 per month in principal and interest – not including taxes and fees. That would equal about $78,472 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 5.6%. A week ago, the 15-year fixed-rate mortgage was at 5.62%.
The annual percentage rate on a 15-year fixed is 5.65%. Last week, it was 5.68%.
At the current interest rate, you would pay $822 per month in principal and interest for every $100,000 borrowed. Over the life of the loan, you would pay $48,541 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) inched up week-over-week to 7.18%, versus 7.13% last week.
At today’s interest rate on a 30-year, fixed-rate jumbo mortgage refinance, a borrower would pay $677 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 has an average interest rate of 6.72%, down 0.03 point from last week.
At today’s rate, a borrower would pay $647 per month in principal and interest per $100,000 borrowed for a 15-year, fixed-rate jumbo refi. Over the life of the loan, that borrower would pay around $133,615 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
There are lots of good reasons to refinance your mortgage, but for most homeowners, it comes down to lowering the interest rate, reducing monthly payments or paying off the loan more quickly. Refinancing can also allow you to tap some of your home’s equity or eliminate private mortgage insurance (PMI).
It’s important to keep in mind that refinancing carries costs, and for that reason makes more sense if you plan to stay in your home for some time. It can be helpful to calculate the “break-even point” for a potential refinance – to see how long it will take for savings from the new mortgage to outweigh closing costs. Try to find out what those fees will be and divide them by the monthly savings from the new mortgage.
Check out our mortgage refinance calculator to help you decide if this is a good time to refinance.
Is Now a Good Time To Refinance?
Now may be a good time to refinance if you can reduce your monthly payment by getting a better interest rate or adjusting your repayment period.
While refinance rates are at multi-year highs, you may qualify for a competitive rate if your credit has improved since getting your existing mortgage or by switching to a shorter loan term, such as a 15-year mortgage. Refinancing from a government-backed loan to a conventional loan with at least 20% equity helps you waive private mortgage insurance, FHA mortgage insurance premiums or the USDA guarantee fees.
There are multiple mortgage refinance options to consider and some that let you tap your home equity.
Consider avoiding refinancing if you can’t get a better rate or reduce your monthly payment. Additionally, you will need to pay closing costs and the application process can be lengthy. These hindrances may exceed the potential benefits of refinancing.
How To Get Today’s Best Refinance Rates
Refinancing a mortgage isn’t that different than taking out a mortgage in the first place, and it’s always smart to have a strategy for finding the lowest rate possible. Here are some suggested approaches to get the best rate:
- Polish up your credit score
- Lower your debt-to-income ratio
- Keep an eye on mortgage rates
- Consider a shorter loan
Having a strong credit score is one of the best things you can do to get approved and get a lower rate. You’re also likely to look better to lenders if you don’t have too much debt relative to your income. You should keep a regular watch on mortgage rates, which fluctuate often. Also see if you can manage a mortgage payment for a shorter loan term since they usually have lower interest rates.
Frequently Asked Questions (FAQs)
How soon can you refinance a mortgage?
In many cases, you can refinance a mortgage as soon as six months after you start paying it down, although some lenders insist that you wait 12 months. You should ask your lender to be sure.
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.
How quickly can you refinance a mortgage?
Many lenders refinance your mortgage in about 45 to 60 days, but it depends on the type of mortgage you choose and other factors. Ask your lender what their time frame is before you borrow to make sure it’s right for you.