What Are Today’s 30-Year Refi Rates?
On Wednesday, May 18, 2022 according to Bankrate’s latest survey of the nation’s largest mortgage lenders, the average 30-year refinance rate is 5.340% with an APR of 5.360%. For a 30-year FHA refinance the average rate is 4.590% with an APR of 5.440%, while a 30-year VA loan refinance has an average rate of 4.710% with an APR of 4.920%.
Current 30-Year Refinance Rates
| Product | Interest Rate | APR |
|---|---|---|
| 30-Year Fixed Rate | 5.340% | 5.360% |
| 30-Year FHA Rate | 4.590% | 5.440% |
| 30-Year VA Rate | 4.710% | 4.920% |
| 30-Year Fixed Jumbo Rate | 5.310% | 5.320% |
| 20-Year Fixed Rate | 5.290% | 5.320% |
| 15-Year Fixed Rate | 4.730% | 4.760% |
| 15-Year Fixed Jumbo Rate | 4.710% | 4.740% |
| 10-Year Fixed Rate | 4.690% | 4.730% |
| 5/1 ARM Rate | 3.750% | 4.730% |
| 5/1 ARM Jumbo Rate | 3.550% | 4.540% |
| 7/1 ARM Rate | 4.800% | 4.420% |
| 7/1 ARM Jumbo Rate | 4.850% | 4.370% |
| 10/1 ARM Rate | 4.900% | 4.590% |
| Product | Interest Rate | APR |
|---|---|---|
| 30-Year Fixed Rate | 5.400% | 5.420% |
| 30-Year FHA Rate | 4.580% | 5.400% |
| 30-Year VA Rate | 4.830% | 4.950% |
| 30-Year Fixed Jumbo Rate | 5.360% | 5.380% |
| 20-Year Fixed Rate | 5.380% | 5.410% |
| 15-Year Fixed Rate | 4.760% | 4.800% |
| 15-Year Fixed Jumbo Rate | 4.790% | 4.820% |
| 10-Year Fixed Rate | 4.700% | 4.740% |
| 5/1 ARM Rate | 3.850% | 4.820% |
| 5/1 ARM Jumbo Rate | 3.610% | 4.830% |
| 7/1 ARM Rate | 4.710% | 4.430% |
| 7/1 ARM Jumbo Rate | 4.780% | 4.360% |
| 10/1 ARM Rate | 4.800% | 4.560% |
Rates as of Wednesday, May 18, 2022
What Is a 30-Year Fixed-Rate Refinance Mortgage?
A 30-year, fixed-rate refinance mortgage is a home loan with a 30-year repayment term that replaces your existing mortgage. This type of mortgage refinance has a fixed interest rate, so the rate you pay will never change over the life of the loan.
When Is the Right Time to Refinance?
The right time to refinance depends on your financial situation and your existing mortgage.
The best time to refinance is when you can save more money than it costs to get the new home loan. This is usually accomplished in two ways: by lowering your monthly payment or getting approved for a lower interest rate. But it could also make sense to refinance from an adjustable-rate mortgage to a fixed-rate if your interest rate is about to increase.
A longer loan term will typically lower your monthly mortgage and interest payments. However, extending your loan term could put you in a situation where you’ll end up paying more interest over the life of the loan. But if you can secure a lower interest rate at the same time that you extend the loan, you may be able to get the best of both worlds. So it’s important to run the numbers to ensure the extra interest you pay over the life of the loan won’t outweigh the short-term monthly savings.
The ideal scenario for refinancing your mortgage is to get both short-term and long- term savings, by significantly reducing your interest rate without extending your loan term. Although, that’s not easily achievable if rates aren’t notably lower than your current mortgage rate. So if you can only lower your monthly payments, but use that extra money to pay off other high-interest debt, that can also make financial sense.
When to Consider a 30-Year Refinance
The best time to look at a 30-year refinance is when refinance rates are much lower than your current mortgage interest rate.
For example, if you’d purchased a home 10 years ago with a $300,000 loan at 4% interest, you’d have $235,734 left to pay. If you refinance that amount with a new 30-year loan, reducing your mortgage rate by 1% would lower your monthly payment by nearly $440 a month. But in this scenario, you’d pay over $15,000 more in interest over the life of the loan because you are repaying the existing balance over an additional 10 years.
| Loan Term | Initial Loan Balance | Current Loan Balance | Interest Rate | Monthly Payment | Remaining Interest |
|---|---|---|---|---|---|
| 30 Years | 300,000 | $235,734 | 4% | $1,432 | $106,674 |
| 30 Years | N/A | $235,734 | 3% | $993 | $122,249 |
Lowering your monthly payment by $440 amounts to an additional $105,600 in liquid cash in your pocket over 20 years. If you’re disciplined, that money can go a long way toward saving and paying off other high-interest debt.
But keep in mind you’ll pay more in interest over the long run that way. That’s because the trade-off for refinancing into a new 30-year loan is that in years 21 to 30 you’re still paying $993 in mortgage and interest payments a month. If you hadn’t refinanced, you wouldn’t have a mortgage during those years, and those last 10 years of mortgage payments add up to $119,160.
This is why some experts, like NextAdvisor contributor Suze Orman, caution against extending your loan term without first thinking it through because it could cost you more in the long run. Orman believes you should never refinance into a mortgage that will extend the amount of time you have until your loan is paid off. One advantage of a shorter-term refinance loan is that it will typically have a lower rate than a 30-year loan.
| Loan Term | Initial Loan Balance | Current Loan Balance | Interest Rate | Monthly Payment | Remaining Interest |
|---|---|---|---|---|---|
| 30 Years | 300,000 | $235,734 | 4% | $1,432 | $106,674 |
| 20 Years | N/A | $235,734 | 2.75% | $1,278 | $71,008 |
As you can see, when rates are low enough you may be able to reduce your monthly payment and the amount of interest you owe without extending your mortgage’s repayment term.
Pros and Cons of a 30-Year Refinance Mortgage
Depending on your individual circumstances, there are upsides and downsides to keep in mind with a 30-year mortgage refinance loan:
Pros
Lower monthly payments
More money to save, invest, or put into an emergency fund each month
Easier to qualify for than a short-term loan that has higher monthly payments
Cons
Longer repayment term
Builds equity more slowly
More expensive over the long term
Higher mortgage rates compared to shorter-term loans
How to Find the Best 30-Year Refinance Mortgage Rates
A lot of factors go into determining the refinance rates you’re eligible for. So to get the best deal, you’ll have to compare mortgage lenders.
In order for a lender to give you an accurate estimate for rates and fees, you’ll need to provide some financial information with supporting documentation. Once you apply, the lender will send you a Loan Estimate. Since all Loan Estimate forms are the same, it makes it easy to find the best deal.
Be sure to look at both the rates and the fees. All refinance loans have closing costs, but how much you’ll pay varies by lender. So the lowest rate may not be the best deal if it comes loaded with extra fees.
How do I view personalized 30-year fixed refinance rates?
You can contact a lender to get a ballpark estimate of what rate you may qualify for. But in order to know exactly what interest rate you’ll get, you need to fill out an application and have your credit pulled.
It can be a good idea to compare offers from two or three different lenders. Not only will your refinance rate vary from one lender to the next, but so will the fees. Refinance closing costs can be thousands of dollars, so paying as little as possible upfront is as important as finding the best rate.
Why should I compare 30-year fixed mortgage refinance rates?
Shopping for the best refinance rate can significantly lower your interest rate and monthly mortgage payment. A study by the fintech startup Haus found a 0.75% rate difference between the highest and lowest rates, all else being equal.
What may seem like a small change in your interest rate, can have a noticeable effect on your budget. Here’s the impact a 0.1% change in your refinance rate would have on your monthly payment and the overall interest you’d pay.
| Loan Term | Loan Amount | Interest Rate | Payment | Total Interest |
|---|---|---|---|---|
| 30 Years | $300,000 | 2.9% | $1,248 | $149,675 |
| 30 Years | $300,000 | 3% | $1,264 | $155,513 |
| 30 Years | $300,000 | 3.1% | $1,281 | $161,189 |
| 30 Years | $300,000 | 3.2% | $1,297 | $167,162 |
For a $300,000 30-year refinance, each 0.1% change in your rate would increase or decrease your payment by roughly $16 and the interest you’d pay by around $5,800.
Will 30-year refinance rates increase?
The year started off at record-lows, but experts have predicted mortgage rates will increase in 2021. Looking at mortgage rate trends for the last couple of months, they have stagnated and hovered near 3%. For the short-term it doesn’t seem like mortgage and refinance rates will make any dramatic moves. But toward the end of 2021 and into 2022, it’s likely that rates will be higher than what they are today.
