Today, a number of closely followed mortgage refinance rates made gains.
Both the 15-year fixed and 30-year fixed saw their average rates increase. The average rate on 10-year fixed refinance mortgages also saw growth.
As of early this year, refinance rates spiked and appear likely to continue on their upward trajectory. Short-term interest rates have already increased multiple times, and the Fed plans to do so again in the coming months.
In the current financial climate, homeowners should carefully consider whether it’s the right time to refinance. Right now, homeowners may struggle to find an interest rate low enough for refinancing to make sense. That said, interest rates aren’t the only thing to concentrate on. The interest you’re paying over time is one thing, but the upfront closing costs can be 3% to 6% of the loan amount. That’s potentially thousands of dollars in fees.
Here’s where refinance rates are today .
Take a look at today’s refinance rates:
You can discover the right refinance rate for you here.
Refinance Rate Forecast: What Drives Changes in Mortgage Rates?
In July, annual inflation was 8.5% based on the Consumer Price Index (CPI). And that’s bad news for refinance rates.
In response to high inflation that has lasted longer than initially anticipated, the Federal Reserve has increased interest rates in May, June, and July. All of this means that we could be stuck with high inflation for longer than we’d like, which increases the likelihood that the Fed will need to be more aggressive in raising rates.
Should You Consider a Refinance Right Now?
As a rule of thumb, refinancing can save you money if you can secure an interest rate that’s around 1% lower than your existing rate. That said, the recent spike in refinance rates has drastically reduced the number of homeowners with interest rates that are well above today’s average rates.
In this hot housing market, the ability to turn the equity in your home into cash with a home equity line of credit (HELOC) has become increasingly popular. A HELOC can be a reasonable option for financing home repairs or improvements, just be sure to understand all of the fine print regardless fees, the interest rate and the repayment schedule..
Pro Tip: What to Know About Refinance Fees
As part of the refinancing process, you may have to pay upfront fees called closing costs. A loan’s closing costs can range from 3% to 6% of the loan amount, making them a costly expense. You may be lower your monthly payment, but pay attention to how long it will take your monthly savings to outweigh what you paid to refinance.
30-Year Fixed Refinance Rates
Right now, the average 30-year fixed refinance has an interest rate of 5.84%, an increase of 21 basis points from a week ago.
You can use our mortgage calculator to get an idea of what your monthly payments will be and to understand how much you could save if you made extra payments. Our mortgage calculator will also show you how much interest you’ll be charged over the entire loan term.
15-Year Refi Rates
Currently, the average rate for a 15-year fixed refinance loan is 5.09%, an increase of 17 basis points from what we saw last week.
Monthly payments on a 15-year refinance loan can be a considerable amount more than what you’d get with a 30-year mortgage. However, a shorter loan term can help you build up equity in your home much more quickly.
Average 10-Year Fixed Refinance Rates
The average 10-year, fixed refinance rate is 5.11%, an increase of 8 basis points from a week ago.
Monthly payments with a 10-year refinance term would cost a lot more per month than you would with a 15-year term, but you’ll pay less interest in the long term.
How we calculate our refinance rates
The table below shows how refinance rates have changed in the past week.
These refi rates are supplied by Bankrate. The information is based on consumers that fit a certain profile, such as the loan is for a primary residence and their FICO score is 740 or higher. If your financial profile doesn’t meet or exceed the standards of Bankrate’s survey, then it’s likely you’ll end up with a refi rate higher than what’s listed..
Bankrate is owned by Red Ventures, Nextadvisor’s parent company.
Rates as of August 26, 2022.
Take a look at mortgage refinance rates for a number of different loans.
Refinance Rate Frequently Asked Questions (FAQ):
Does Refinancing Still Make Sense?
Refinancing isn’t solely dependent on the numbers, like the refinance rate, your situation is also a big factor. Consider whether or not refinancing fits into your life plans and financial desires
Generally speaking, refinancing makes sense if you can lower your interest rate by 1% or more. However, refinancing isn’t always about reducing your mortgage rate. Recently, more homeowners have taken advantage of increasing home values with a HELOC. Home equity lines of credit typically have higher rates compare to other options, but it can be a good way to pay for home upgrades or to pay off other higher interest debt.
Overall, now is still an excellent time to refinance as long as it make sense for your situation.
How to Ensure You Get the Best Refi Rate
Refinance rates are influenced by your personal finances. If you have a higher credit score and lower loan-to-value (LTV) ratios will usually be able to obtain lower refinance rates.
But your personal financial situation isn’t the only factor that impacts the interest rate you qualify for. A lower loan-to-value ratio (LTV) will help you qualify for a discounted refinance rate. So it’s better to have more equity. Having at least 20% equity in your property is ideal.
Even the mortgage itself will impact what your mortgage refinance rate will be. A shorter-term refinance loan generally has lower refinance rates than mortgage refinance loans with longer repayment terms, all else equal. Your interest rate is also affected by the type of refinance loan you plan on taking out. A cash-out refinance loan usually comes with a higher refinance rate than other types of refinance loans.
How Much Does Refinancing Cost?
How much it costs to refinance can vary widely depending on these factors:
- Location
- Type of mortgage
- The lender
- Loan amount
- FICO score
- The property’s equity
In general, refinance closing costs are 3% to 6% of the loan balance. Your state and local regulations can influence what fees and taxes you pay. Having more equity in the home and a higher credit score will make it easier to qualify for the refinance loan, secure a lower rate, and to get lenders to compete for your business.
Current Mortgage Rates by Loan Type
Mortgage Refi Rates
Home Loan Rates
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Current Mortgage Refinance Rates, August 26, 2022 | Rates Move Up & Latest News Update
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