Financial basis

Current refinancing rates as of May 2, 2022: rates are increasing

A few closely watched mortgage refinance rates advanced today. 15-year and 30-year fixed refinancing saw their average rates increase. At the same time, average 10-year fixed refinancing rates also increased.

Although refinance rates fluctuate slightly on a daily basis, homeowners can expect to see rates increase over the course of this year. Over the past few months, rates have trended higher from historic lows seen during the pandemic and are now closer to 2018 rate levels. This means that if you are looking to cut dollars and interest from your current monthly mortgage payments, these could be the lowest rates of 2022. Be sure to think about your goals and situation, and compare offers to find a lender who can meet your needs. Needs.

30-year fixed rate refinancing

The current average interest rate for a 30-year refinance is 5.42%, up 16 basis points from what we saw a week ago. (One basis point equals 0.01%.) A 30-year fixed refinance will generally have lower monthly payments than a 15- or 10-year refinance. For this reason, a 30-year refinance can be a good idea if you’re having trouble making your monthly payments. Be aware, however, that the interest rates will generally be higher than those of a 15 or 10 year refinance and that you will pay off your loan at a slower rate.

15-year fixed-rate refinancing

The current average interest rate for 15-year refinances is 4.69%, an increase of 22 basis points from last week. A 15-year fixed refinance will most likely increase your monthly payment compared to a 30-year loan. However, you will also be able to pay off your loan faster, saving you money over the life of the loan. Interest rates for a 15-year refinance also tend to be lower than a 30-year refinance, so you’ll save even more in the long run.

10-year fixed rate refinancing

The current average interest rate for a 10-year refinance is 4.65%, an increase of 14 basis points from last week. Compared to a 30-year and 15-year refinance, a 10-year refinance will generally have a lower interest rate but a higher monthly payment. A 10-year refinance can help you pay off your home much faster and save on interest. But you need to confirm that you can afford a higher monthly payment by evaluating your budget and your overall financial situation.

Where are the rates going

At the start of the pandemic, refinance rates fell to historic lows, but now interest rates are hovering around pre-pandemic levels. The Federal Reserve recently hiked rates for the first time since 2018 and plans to raise them multiple times in 2022. Given this policy, along with strong economic growth and inflation, which is at an all-time high in four decades, rates are expected to continue to rise this year. year. Although there have been some temporary interest rate cuts, it is impossible to predict when another cut might occur. This means it’s a good idea to try to take advantage of the refinance now and lock in a decent rate.

We track refinance rate trends using data collected by Bankrate, which is owned by CNET’s parent company. Here is a chart with the average refinance rates reported by lenders nationwide:

Average refinancing interest rate

Product Rate A week ago Switch
30-year fixed refi 5.42% 5.26% +0.16
15-year fixed refi 4.69% 4.47% +0.22
10-year fixed refi 4.65% 4.51% +0.14

Rates as of May 2, 2022.

How to find the best refinance rate

When researching refinance rates online, it’s important to remember that your specific financial situation will influence the rate you’ll be offered. Market conditions are not the only factor in interest rates; your particular application and your credit history will also play an important role.

To get the best interest rates, you’ll generally need a high credit score, low credit utilization, and a history of regular, on-time payments. You can usually get a good idea of ​​average interest rates online, but be sure to speak to a mortgage professional to see the specific rates you qualify for. You also need to consider fees and closing costs that could outweigh the potential savings from a refinance.

You should also be aware that many lenders have had stricter loan approval requirements in recent months. If you have a low credit score or a bad credit history, you may find it difficult to get refinance at the lowest interest rates.

One way to get the best refinance rates is to strengthen your borrower application. You can do this by monitoring your credit, getting into debt responsibly, and getting your finances in order before applying for a refinance. Remember to speak with several lenders and shop around for the best rate.

When should I refinance?

Generally, it’s a good idea to refinance if you can get a lower interest rate than your current interest rate or if you need to change the term of your loan. Although interest rates have been low for the past few months, you should look at more than market interest rates to decide if a refinance is right for you.

Refinancing may not always make financial sense. Consider your personal goals and financial situation. How long do you plan to stay at home? Are you refinancing to lower your monthly payment, pay off your home sooner – or for a combination of reasons? And don’t forget fees and closing costs, which can add up.

Some lenders have tightened their requirements in recent months, so you may not be able to get refinance at posted interest rates — or even refinance at all — if you don’t meet their standards. If you can get a lower interest rate or pay off your loan sooner, refinancing can be a great decision. But carefully weigh the pros and cons first to make sure it’s right for your situation.