Mortgages

Refinance Rates Today, February 3, 2022 | rates go up

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Today, several benchmark mortgage refinance rates advanced.

Both the 15-year fixed and the 30-year fixed saw their average rates rise. The average rate on 10-year fixed refinance mortgages also increased.

Refinancing interest rates are constantly changing. However, they are currently very low. For those looking to refinance their existing mortgage, this may be the right move to secure a great interest rate.

Refinance rates currently are:

You can find the refinancing rate that’s right for you here.

2022 Refinance Rate Trends

Refinancing and mortgage rates could be prone to significant volatility this year. However, interest rates are expected to continue to rise steadily throughout 2022. Strong economic conditions and higher inflation have contributed to this expected rate increase. However, there is uncertainty surrounding the COVID-19 Omicron strain and the potential impact of other coronavirus variants on the economy. Regardless of most experts’ predictions that interest rates will rise in the near future, it’s unlikely we’ll see consistent increases overnight. So expect refinancing rates to continue to bounce.

How the Refinance Rate Forecast Affects You

Although rates have risen dramatically in recent weeks, refinance rates remain low. It may make sense to refinance, especially when you compare the current rate to any other time in mortgage rate history. However, your interest rate is not the only factor to consider. Your financial goals and life plans should also come into play. If you plan to move within the next five years, a refinance may not make sense. In order for the potential savings on your monthly payment to exceed the fees you pay to refinance, you’ll need to break even on the loan.

A home equity line of credit (HELOC) is a useful alternative to refinancing if you want to turn the equity in your properties into cash. When you’re withdrawing equity from your home, the considerations are different. What you want to use the money for may be more important than your interest rate savings.

What you need to know about refinance fees

When you choose to refinance your existing home loan, you’ll typically pay up-front fees known as closing costs. It’s important to pay attention to these fees because they can average between 3% and 6% of your loan balance. Although your monthly payment may be lower, keep an eye on how long it will take for your monthly savings to exceed what you paid to refinance.

30-year fixed refinance rates

Right now, the average 30-year fixed refinance carries an interest rate of 3.76%, an increase of 3 basis points from what we saw last week.

You can use our mortgage calculator to get an idea of ​​what your monthly payments will be and find out how much less interest you’ll pay by making additional payments. Our mortgage calculator will also show you how much interest you’ll be charged for the entire term of the loan.

15-year average fixed refinance rates

Right now, average 15-year fixed refinance rates are 3.13%, an increase of 8 basis points from the previous week.

Monthly payments on a 15-year refinance loan will be higher compared to a 30-year refinance at the same rate. However, a shorter loan term can help you build equity in your home much more quickly.

10-year fixed refinance rates

The average 10-year fixed refinance rate is 3.20%, an increase of 20 basis points from what we saw last week.

Monthly payments with a 10-year refinance term would cost even more than what you would pay on a 15-year loan. The advantage is that you will end up paying less interest over the life of the loan.

How our refinance rates are calculated

Our refinance rate trends are based on daily rate data from Bankrate, which is owned by the same parent company as NextAdvisor. These daily average refinance interest rates are based on a consumer profile of the following:

  • Loan-to-value (LTV) or 80% or less
  • primary residence
  • FICO score of 740 or higher
  • Existing Detached Single Family Home (Not New Construction)

Information provided to Bankrate by lenders across the country is provided in the following table:

Rates as of February 3, 2022.

Take a look at mortgage refinance rates for several different loans.

Frequently Asked Questions (FAQ) about the refinancing rate:

Does it still make sense to refinance?

Whether or not to refinance doesn’t just depend on numbers, like the refinance rate. Your personal circumstances are also an important consideration. 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 lowering your mortgage interest rate. The popularity of opening a home equity line of credit has grown recently as homeowners have decided to capitalize on rising home values. If you’re going to open a home equity line of credit, you’ll want to have a plan for the money beforehand. HELOCs have higher interest rates than mortgages, and at the same time, it will increase what you owe.

At the end of the day, it’s a good time to refinance if refinancing aligns with your financial goals and helps you achieve them.

How to qualify for the lowest refinance rate

Your financial situation has a big impact on the refinance rate you’ll be able to secure. Having a lower loan-to-value ratio for your home and a higher credit score generally translates to a better interest rate.

But your personal financial situation isn’t the only thing that will affect your refinance interest rate. The equity you have in the property also comes into play. You want to have at least 20% equity or a loan-to-value ratio of 80% or less.

Even the mortgage itself can determine what your refinance interest rate will be. A loan with a shorter payment term generally has lower interest rates than refinance loans with longer payment terms, all other things being equal. Also, if you want to withdraw cash from your home with a cash-out refinance, you should expect to pay a higher mortgage rate for that privilege.

What is the average cost of refinancing?

Refinancing a mortgage typically involves paying closing costs of 3% to 6% of the loan amount. For example, if you have a $300,000 mortgage, you can expect to pay between $9,000 and $18,000 in closing costs.

There are a number of factors that different lenders consider when evaluating your situation. Compare your options and compare prices. Everything from the location of the home to the type of loan you’re refinancing could affect your upfront costs.

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