Both 15-year fixed and 30-year fixed refinances saw their mean rates recede. The average rates for 10-year fixed refinances also declined.
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 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 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
For 30-year fixed refinances, the average rate is currently at 6.41%, a decrease of 31 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. In exchange for the lower monthly payments though, rates for a 30-year refinance will typically be higher than 15-year and 10-year refinance rates. You’ll also pay off your loan slower.
15-year fixed-rate refinance
The average 15-year fixed refinance rate right now is 5.92%, a decrease of 31 basis point compared to one week ago. Refinancing to a 15-year fixed loan from a 30-year fixed loan will likely raise your monthly payment. But you’ll save more money over time, because you’re paying off your loan quicker. 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 6.05%, a decrease of 30 basis points from what we saw the previous week. A 10-year refinance will typically feature the highest monthly payment of all refinance terms, but the lowest interest rate. A 10-year refinance can help you pay off your house much quicker and save on interest. 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 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 information 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 | 6.41% | 6.72% | -0.31 |
| 15-year fixed refi | 5.92% | 6.23% | -0.31 |
| 10-year fixed refi | 6.05% | 6.35% | -0.30 |
Rates as of Jan 10, 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, 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?
In order for a refinance to make sense, you’ll generally want to get a lower interest rate than your current rate. Aside from interest rates, changing your loan term is another reason to refinance.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.
