Today’s mortgage refinance rates: Look to shorter terms for greater interest savings | July 20, 2022
Despite increases in 3 key refinance rates, shorter repayment terms still offer savings and the opportunity to pay off a mortgage sooner
Written by
Chris Jennings is an authority on mortgages and personal finance. His work has been featured by Fox Business, MSN, AOL, and Yahoo Finance.
Updated October 16, 2024, 2:44 AM EDT
- 30-year fixed-rate refinance: 5.500%, up from 5.490%, +0.010
- 20-year fixed-rate refinance: 5.250%, up from 5.125%, +0.125
- 15-year fixed-rate refinance: 4.875%, up from 4.750%, +0.125
- 10-year fixed-rate refinance: 4.875%, unchanged
Rates last updated on July 20, 2022. These rates are based on the assumptions shown here.
What this means: Mortgage refinance rates edged up for three key terms today, bringing 30-year rates up to 5.5%. Rates for shorter terms remain under 5%, but recent increases narrow the gap between longer and shorter terms. Still, homeowners looking to refinance may find that 15-year rates offer the best opportunity for lower interest costs and manageable monthly payments. Homeowners who want to make home improvements can save more on interest with a cash-out refinance than they would by funding those improvements with credit cards or personal loans.
WHAT IS CASH-OUT REFINANCING AND HOW DOES IT WORK?
How mortgage rates have changed over time
Today’s mortgage interest rates are well below the highest annual average rate recorded by Freddie Mac — 16.63% in 1981. A year before the COVID-19 pandemic upended economies across the world, the average interest rate for a 30-year fixed-rate mortgage for 2019 was 3.94%. The average rate for 2021 was 2.96%, the lowest annual average in 30 years.
The historic drop in interest rates means homeowners who have mortgages from 2019 and older could potentially realize significant interest savings by refinancing with one of today’s lower interest rates.
How to get your lowest mortgage refinance rate
If you’re interested in refinancing your mortgage, improving your credit score and paying down any other debt could secure you a lower rate. It’s also a good idea to compare rates from different lenders if you're hoping to refinance so you can find the best rate for your situation.
Borrowers can save $1,500 on average over the life of their loan by shopping for just one additional rate quote, and an average of $3,000 by comparing five rate quotes, according to research from Freddie Mac.
Be sure to shop around and compare current mortgage rates from multiple mortgage lenders if you decide to refinance your mortgage. You can do this easily with Credible's free online tool and see your prequalified rates in only three minutes.
How does Credible calculate refinance rates?
The rates assume a borrower has a 740 credit score and is borrowing a conventional loan for a single-family home that will be their primary residence. The rates also assume no (or very low) discount points and a down payment of 20%.
Think it might be the right time to refinance? Be sure to shop around and compare rates with multiple mortgage lenders. You can do this easily with Credible and see your prequalified rates in only three minutes.
What is the average cost of a refinance?
Generally, you’ll encounter costs — $5,000 on average, according to Freddie Mac — when refinancing your mortgage.
Your exact refinancing costs will depend on multiple factors, including the size of your loan and where you live. Typical refinancing costs include:
- The cost of recording your new mortgage
- Appraisal fees
- Attorney fees
- Lender fees, such as origination or underwriting
- Title service fees
- Credit report fees
- Mortgage points
- Prepaid interest charges
Keep in mind there’s no such thing as a truly no-cost refinance. Lenders who market "no-cost loans" typically charge a higher interest rate and roll the costs into the loan — which means you’ll pay more interest over the life of the loan.
Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.
As a Credible authority on mortgages and personal finance, Chris Jennings has covered topics that include mortgage loans, mortgage refinancing, and more. He’s been an editor and editorial assistant in the online personal finance space for four years. His work has been featured by MSN, AOL, Yahoo Finance, and more.