Both 15-year fixed and 30-year fixed refinances saw their average rates decline significantly over the last seven days. The average rate for 10-year fixed refinances also tumbled.
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 average 30-year fixed refinance rate right now is 6.48%, a decrease of 22 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) One reason to refinance to a 30-year fixed loan from a shorter loan term is to lower your monthly payment. Because of this, a 30-year refinance can be a good idea if you’re having trouble making your monthly payments. However, interest rates for a 30-year refinance will typically be higher than rates for a 15-year or 10-year refinance. It’ll also take you longer to pay off your loan.
15-year fixed-rate refinance
The average rate for a 15-year fixed refinance loan is currently 6.08%, a decrease of 11 basis points over last week. Refinancing to a 15-year fixed loan from a 30-year fixed loan will likely raise your monthly payment. However, you’ll also be able to pay off your loan quicker, saving you money over the life of the loan. 15-year refinance rates are typically lower than 30-year refinance rates, which will help you save even more in the long run.
10-year fixed-rate refinance
The current average interest rate for a 10-year refinance is 6.21%, a decrease of 15 basis points compared to one week ago. 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 quicker and save on interest. But you should confirm that you can afford a higher monthly payment by evaluating your budget and overall financial situation.
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 provided by lenders nationwide:
Average refinance interest rates
| Product | Rate | Last week | Change |
|---|---|---|---|
| 30-year fixed refi | 6.48% | 6.70% | -0.22 |
| 15-year fixed refi | 6.08% | 6.19% | -0.11 |
| 10-year fixed refi | 6.21% | 6.36% | -0.15 |
Rates as of Jan. 9, 2023.
How to find the best refinance rate
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 should I 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.
