Both 15-year fixed and 30-year fixed refinances saw their average rates rise. The average rate on 10-year fixed refinance also inched up.
Like mortgage rates, refinance rates fluctuate on a daily basis. With inflation at a 40-year high, the Federal Reserve has hiked the federal funds rate seven times in 2022 to try to slow surging inflation. 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 will depend largely on how things play out with inflation. If inflation cools, rates will likely follow suit. But if inflation remains high, we could see refinance rates maintain 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 average 30-year fixed refinance rate right now is 6.70%, an increase of 5 basis points over this time last week. (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. Because of this, a 30-year refinance can be a good idea if you’re having trouble making your monthly payments. Be aware, though, that interest rates will typically be higher compared to a 15-year or 10-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 6.19%, an increase of 8 basis points over last week. Refinancing to a 15-year fixed loan from a 30-year fixed loan will likely raise your monthly payment. On the other hand, you’ll save money on interest, since you’ll pay off the loan sooner. 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
For 10-year fixed refinances, the average rate is currently at 6.36%, an increase of 13 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 faster and 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 rates dropped to historic lows, but they have been steadily climbing since the beginning of 2022. The Fed recently raised interest rates by another 0.50 percentage points and appears poised to continue to raise rates in 2023. That noted, if inflation eases, rates could level off and begin to decline.
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
| Product | Rate | A week ago | Change |
|---|---|---|---|
| 30-year fixed refi | 6.70% | 6.65% | +0.05 |
| 15-year fixed refi | 6.19% | 6.11% | +0.08 |
| 10-year fixed refi | 6.36% | 6.23% | +0.13 |
Rates as of Jan 2, 2023.
How to shop for refinance rates
It’s important to understand that the rates advertised online may not apply to you. Your interest rate will be influenced by market conditions as well as your credit history and application.
Having a high credit score, 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
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. 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 have steadily increased since the beginning of the year, the pool of refinancing applicants has shrunk significantly. If you bought your house when interest rates were lower than current rates, you may likely not gain any financial benefit from refinancing your mortgage.
