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The rate on a 30-year fixed refinance rose to 6.35% today, according to the Mortgage Research Center. Rates averaged 5.25% for a 15-year financed mortgage and 5.98% for a 20-year financed mortgage.
Related:Compare Current Refinance Rates
30-Year Fixed Refinance Interest Rates Drop 2.75%
Currently, the average rate for a 30-year, fixed-rate mortgage refinance is 6.35%, down 2.75% from a week ago. Borrowers with a 30-year, fixed-rate mortgage of $100,000 will pay $623 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 $124,711.
Another way of looking at loan costs is the annual percentage rate, or APR. For a 30-year, fixed-rate mortgage, the APR is 6.38%, lower than last week’s 6.56%. The APR is essentially the all-in cost of the home loan.
20-Year Refi Rates Drop 5.25%
The 20-year fixed mortgage refinance average rate stands at 5.98%, versus 6.31% last week.
The APR, or annual percentage rate, on a 20-year fixed mortgage is 6.01%. It was 6.34% last week.
At the current interest rate, a 20-year, fixed-rate mortgage refinance of $100,000 would cost $715 per month in principal and interest. That doesn’t include taxes and fees. That borrower would pay roughly $72,137 in total interest over the life of the loan.
15-Year Fixed Refinance Rates Drop 2.83%
For a 15-year fixed refinance mortgage, the average interest rate is currently 5.25%. The same time last week, the 15-year fixed-rate mortgage stood at 5.41%.
The APR, or annual percentage rate, on a 15-year fixed mortgage is 5.3%. Last week, it was 5.45%.
Based on the current interest rate, a 15-year, fixed-rate mortgage refinance of $100,000 would cost $804 per month in principal and interest—not including taxes and fees. That would equal about $45,134 in total interest over the life of the loan.
30-Year Jumbo Refinance Interest Rates Drop 1.09%
The average interest rate on the 30-year fixed-rate jumbo mortgage refinance (a loan above the federal conforming loan limit of $806,500 in most places) decreased week-over-week to 6.65%. A week ago, the average rate was 6.72%.
Borrowers with a 30-year fixed-rate jumbo mortgage refinance with today’s interest rate will pay $642 per month in principal and interest per $100,000 borrowed.
15-Year Jumbo Refinance Rates Climb 0.66%
A 15-year, fixed-rate jumbo mortgage refinance has an average interest rate of 5.94%, up 0.66% from last week.
At today’s rate, a borrower would pay $840 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 $51,515 in total interest.
Are Refinance Rates and Mortgage Rates the Same?
Refinance rates are different from mortgage rates and tend to be slightly higher. The rate difference can vary by program and is something to consider as you compare the best mortgage refinance lenders.
In addition to having different refinance rates for conventional, FHA, VA and jumbo applications, cash-out refinance rates are higher as you’re borrowing from your available equity.
Rates for government-backed loan programs such as FHA and VA mortgage refinances can be lower than a conventional or jumbo refinance, as there is less risk for lenders. Still, you should compare your estimated loan’s annual percentage rate (APR), which includes all additional fees and determines the interest charges.
When considering a mortgage refinance, compare your current interest rate, mortgage balance and loan term with the new interest rate and term. This comparison helps you estimate your new monthly payment and savings, making it easier to determine if refinancing is the right choice.
When Refinancing Makes Sense
Refinancing your mortgage can be a wise move for many reasons, most notably lowering your interest rate or your monthly payments. It can also help you pay down your mortgage sooner, access your home’s equity or get rid of private mortgage insurance (PMI).
But there are closing costs associated with refinancing, so it probably makes more sense to refinance if you know you’ll be keeping your home for some time. You can determine the “break-even point” for a potential refinance, or how long it will take for savings from a new mortgage to surpass any closing costs. Find out what those costs will be and divide them by the monthly savings you’ll realize with the new mortgage.
The Forbes Advisor mortgage refinance calculator can help you run the numbers to see if it’s a good time for you to refinance.
How To Get Today’s Best Refinance Rates
Much like when you shopped for a mortgage when purchasing your home, when you refinance here’s how you can find the lowest refinance rate:
- Maintain a good credit score
- Consider a shorter-term loan
- Lower your debt-to-income ratio
- Monitor mortgage rates
A solid credit score isn’t a guarantee that you’ll get your refinance approved or score the lowest rate, but it could make your path easier. Mortgage refinance lenders are also more likely to approve you if you don’t have excessive monthly debt. You also should keep an eye on mortgage rates for various loan terms. They fluctuate frequently, and loans that need to be paid off sooner tend to charge lower interest rates.
Refinancing Rate Outlook for 2025
Since the final quarter of 2024, national average mortgage rates have remained in the middle-to-high 6% range, and experts expect this trend to continue through the first half of 2025.
If inflation slows and unemployment levels hold steady or rise, the Federal Reserve may reduce the federal funds rate, potentially leading to lower mortgage rates in the second half of the year. However, if inflation stays high and unemployment decreases, rates are likely to remain stable.
Since mortgage rates are expected to change little in the first half of the year, those looking to refinance at a lower rate should consider waiting until later in the year. In the meantime, improving your credit score and paying down your loan balance will help you secure the lowest possible rate when you’re ready to explore refinancing options.
Frequently Asked Questions (FAQs)
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 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 do you find the best refinancing lender?
Our guide to the best mortgage refinance lenders is a good starting point, but make sure you compare multiple lenders and get more than one quote. It’s always a good idea to find out the closing costs lenders charge, and also to make sure you can communicate easily with your lender. Conditions in the housing market change frequently, so being able to depend on your lender is crucial.