Refinance Rates on June 20, 2022: Rates Continue to Rise
A number of important mortgage refinance rates increased today. Both 15-year fixed and 30-year fixed refinances saw their average rates go up. In addition, the average rate on 10-year fixed refinance also saw an increase.
Refinance rates have been consistently rising since the beginning of 2022, and homeowners can expect to see rates continue to go up over the course of this year. In response to inflation, which is at a 40-year high, the Federal Reserve has hiked interest rates three times already, and plans to raise them throughout the rest of 2022. The Fed's moves indirectly influence the rates that homeowners will pay when refinancing a home.
That means if you're looking to shave dollars and interest off your current monthly mortgage payments, these could be the lowest rates you'll see for a while. Make sure to think about your goals and circumstances, and compare rates and fees to find a mortgage lender who can meet your needs.
30-year fixed-rate refinance
The average 30-year fixed refinance rate right now is 5.94%, an increase of 19 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) Refinancing to a 30-year fixed loan from a shorter loan term can lower your monthly payments. If you're having difficulties making your monthly payments currently, a 30-year refinance could be a good option for you.
However, interest rates for a 30-year refinance will typically be higher than rates for a 15-year or 10-year refinance. It'll also take you longer to pay off your loan.
15-year fixed-rate refinance
For 15-year fixed refinances, the average rate is currently at 5.18%, an increase of 26 basis points over last week. With a 15-year fixed refinance, you'll have a larger monthly payment than a 30-year loan.
But you'll save more money over time, because you're paying off your loan quicker.
15-year refinance rates are typically lower than 30-year refinance rates, which will help you save even more in the long run.
10-year fixed-rate refinance
For 10-year fixed refinances, the average rate is currently at 5.27%, an increase of 44 basis points compared to one week ago. A 10-year refinance will typically feature the highest monthly payment of all refinance terms, but the lowest interest rate. A 10-year refinance can help you pay off your house much faster and save on interest in the long run.
However, you should analyze your budget and current financial situation to make sure you'll be able to afford the higher monthly payment.
Where rates are headed
At the start of the pandemic, refinance rates dropped to historic lows, but they have been steadily climbing since the beginning of this year. Refinance rates are rising due to inflation, which is at its highest level in four decades, as well as actions taken by the Federal Reserve. The Fed recently raised interest rates by 0.75 percentage points -- the highest increase in almost three decades -- and plans to raise them several more times throughout 2022 to slow the economy.
That means it's a good idea to take advantage of refinancing now and lock in a decent rate before they continue going up. We track refinance rate trends using data collected by Bankrate, which is owned by CNET's parent company. Here's a table with the average refinance rates provided by lenders nationwide:
Average refinance interest rates
|30-year fixed refi||5.94%||5.75%||+0.19|
|15-year fixed refi||5.18%||4.92%||+0.26|
|10-year fixed refi||5.27%||4.83%||+0.44|
Rates as of June 20, 2022.
How to find personalized refinance rates
It's important to understand that the rates advertised online may not apply to you.
Your interest rate will be influenced by market conditions as well as your credit history and application. Having a high credit score, low credit utilization ratio and a history of consistent and on-time payments will generally help you get the best interest rates. You can get a good feel for average interest rates online, but make sure to speak with a mortgage professional in order to see the specific rates you qualify for.
To get the best refinance rates, you'll first want to make your application as strong as possible. The best way to improve your credit ratings is to get your finances in order, use credit responsibly and monitor your credit regularly. Don't forget to speak with multiple lenders and shop around to find the best rate.
Refinancing can be a great move if you get a good rate or can pay off your loan sooner -- but consider carefully whether it's the right choice for you at the moment.
Is now a good time to refinance?
In order for a refinance to make sense, you'll generally want to get a lower interest rate than your current rate. Aside from interest rates, changing your loan term is another reason to refinance. When deciding whether to refinance, be sure to take into account other factors besides market interest rates, including how long you plan to stay in your current home, the length of your loan term and the amount of your monthly payment.
And don't forget about fees and closing costs, which can add up.
As interest rates have steadily increased since the beginning of the year, the pool of people eligible for refinancing has shrunk significantly.
If you bought your house when interest rates were lower than current rates, you may likely not gain any financial benefit from refinancing your mortgage.