30-Year Refinance Rates

How Coronavirus affects 30-year refinance rates

Due to the economic impact of COVID-19, the federal government has cut interest rates. These cuts affect various types of mortgages differently, and have also driven a spike in demand, putting pressure on lenders and their staff. As a result, at times, you may see higher rates, or no rates, on our site. Learn more about the coronavirus’ impact on mortgage rates.

Today's 30-year refinance rates

The table below brings together a comprehensive national survey of mortgage lenders to help you know what are the most competitive 30-year fixed refinance rates available. This interest rate table is updated daily to give you the most current rates when choosing a 30-year refinance loans.

What is a 30-year refinance loan?

A 30-year fixed-rate mortgage is the most common type of loan. It has a set rate, which keeps your principal and interest payments stable.

Refinancing with a 30-year loan allows you to pay off and replace your existing loan with a new, longer-term loan and a different rate. There are several reasons to refinance into this type of loan, including reducing your monthly payment, lowering your mortgage rate or changing the type of loan you currently have.

What are the current 30-year refinance rates?

The benchmark 30-year fixed refinance rate in early 2020 was at 3.900 percent with an APR of 4.060 percent, according to Bankrate's survey of the nation's largest refinance lenders.

Current 30-year refinance rates are historically low compared what they were when the housing crisis hit in 2008. Still, savvy shoppers with good credit can almost always find lenders willing to offer better-than-average deals on refinances.

When to consider a 30-year refinance over other terms

A 30-year refinance term comes with a slew of benefits. But whether you should refinance, or "refi," into longer or shorter term depends on your financial situation.

Refinancing into a 30-year term from a shorter term — say, a 15-year fixed-rate term — can be worthwhile if you're interested in lowering your monthly payment. It's even more favorable if you can lock in a lower interest rate and improve your financial situation in some way.

For example, let's say you have a 15-year mortgage loan of $100,000 at an interest rate of 5%. Your monthly principal and interest payments would be $791. If you were to refinance your loan into a 30-year mortgage at a rate of 3.5%, you'd lower your monthly payments by nearly $350. That calculation doesn't include expenses like property taxes, homeowner's insurance or HOA fees, or closing costs including points, but it's a good example of how refinancing into a longer term can free up monthly cash flow.

It’s important to keep in mind that refinancing into a longer term will increase the interest you pay over the life of the loan, since you're essentially starting your loan from scratch. In addition, you may have to pay lender origination fees, third-party fees for appraisal and closing costs, which increases the cost of the loan even further.

Using a refi to get a shorter term would save you from paying additional interest costs and potentially lower your interest rate. It could, however, boost the overall monthly payment of your loan.

Before you decide to refinance, figure out your goal for doing so and match the term of the loan with your financial situation.

Main pros of a 30-year refi:

• Lower monthly payments.
• Provides more monthly cash flow.
• You could reduce your interest rate.

Main cons of a 30-year refi:

• More total interest paid over the life of the loan.
• Longer terms have higher mortgage rates overall.
• It takes longer to gain equity.

When is it the right time to refinance?

There are two common reasons to refinance: to reduce monthly mortgage payments or to save on the overall interest you pay on your house long-term. In some cases, refinancing will accomplish both of those goals, but not always. Here are a few things to consider when deciding if it's the right time to refinance:

• The purpose of the refinance: Extending the length of your loan will lower your monthly payments while increasing the interest you pay over the life of the loan. Shortening the length of the loan will lower the interest you pay over the life of the loan but often increase your monthly payments. It's important to know what you want to accomplish when deciding whether or not it’s time to refi.
• How long you'll be in the home: Refinancing generally only makes sense if you plan to spend several more years in your home. It can sometimes take years to break even on the cost of refinancing. If you won’t be in your home for much longer, it might not make sense to refinance.
• Your ability to qualify: Refinancing might make sense for you, but that doesn't necessarily mean you'll qualify. Lenders take into account a number of factors when considering a refinance on a home, including the amount of equity in the home, your income and your creditworthiness.

Of course, there are several other purposes for choosing to refinance. A common reason is to tap into home equity. If you have enough equity in your home (at least 20%), you can use a cash-out refinance to pay for expenses such as home improvements, to get rid of credit card debt or to pay for emergencies. Specifically, opting for a 30-year cash-out refinance not only provides a chunk of cash for major expenses, but it also frees up cash-flow on a month-to-month basis.

When should you refinance into a fixed loan from another type of loan?

Switching to a fixed 30-year loan can be advantageous in certain circumstances, depending on the type of mortgage you have currently.

It can be a particularly good move if you presently have an adjustable rate mortgage with a fixed-rate period that's about to expire. Instead of extending the ARM into its adjustable-rate period, you could refinance into a 30-year fixed-rate mortgage to keep fixed payments and create wiggle room in your budget.

Changing loan types can also make sense if you have an FHA loan and you'd like to get rid of mortgage insurance. As long as you 20 percent or more equity in your home, a conventional 30-year mortgage refinance can get rid of FHA-required mortgage insurance.

How much does a refinance possibly save?

The amount you can potentially save, if any, with a refi depends on a number of factors, including your current interest rate, the new rate you might receive, closing costs and how long you plan to stay in the home.

Generally, a 30-year refi will lower your monthly payments and increase the interest you pay over the life of the loan. So, while you could save hundreds of dollars per month on your payment, you might increase the interest you pay over the life of the loan by thousands.

If you're on the fence about a refi, crunch the numbers to see if refinancing your home loan will save you money in your particular financial situation. It’s also beneficial to calculate your refinance break-even point, which can help you decide if you'll be in your home long enough to make it financially feasible.

How do I find the best fixed 30-year refinance rate?

Homeowners looking for a great refinance rate have a lot of tools at their disposal. Here are a few best practices for landing a great rate:

1. Check your credit. While there aren't many ways to quickly improve your credit score, it's worthwhile to check your credit reports for errors and correct blemishes before you begin shopping for a loan. Paying down a large sum can also help give your score a boost. Any improvements in your credit will act favorably towards the rate you receive.
2. Compare loans at multiple lenders. Make sure to use the same details about your property value, area, loan amount, credit score and term. Pay close attention to the estimated upfront costs in addition the rate when shopping.
3. Get quotes from several lenders. Once you've narrowed down your options, request quotes from more than one lender in order to get the best offer possible.
4. Consider buying points. When you buy points, you pay the lender up front for a lower rate. One point equals 1 percent of the loan amount. Buying points doesn't always make sense. Make sure to talk to you lender about options.
5. Lock in your rate. If you’ve settled on a lender, lock in the rate so that the lender will honor the current rate even if rates rise during the closing process.