Pros and cons of a 30-year fixed refinace loan

Pros include, lower monthly payments, more monthly cash flow and plenty of choices. Cons include more total interest paid over the life of the loan, tend to have higher rates overall and it takes longer to gain equity.

Today’s 30-year refinance rates

Q: What is a 30-year fixed refinance mortgage?

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.

Q: When should you consider a 30-year refinance?

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

June 12, 2021

By Jeff Ostrowski, Reviewed by Greg McBride, CFA

On Saturday, June 12, 2021, the national average 30-year fixed refinance APR is 3.300%. The average 30-year fixed mortgage APR is 3.300%, according to Bankrate’s latest survey of the nation’s largest refinance lenders.

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money.

About our Mortgage Rate Tables: The above mortgage loan information is provided to, or obtained by, Bankrate. Some lenders provide their mortgage loan terms to Bankrate for advertising purposes and Bankrate receives compensation from those advertisers (our "Advertisers"). Other lenders' terms are gathered by Bankrate through its own research of available mortgage loan terms and that information is displayed in our rate table for applicable criteria. In the above table, an Advertiser listing can be identified and distinguished from other listings because it includes a "Next" button that can be used to click-through to the Advertiser's own website or a phone number for the Advertiser.

Availability of Advertised Terms: Each Advertiser is responsible for the accuracy and availability of its own advertised terms. Bankrate cannot guaranty the accuracy or availability of any loan term shown above. However, Bankrate attempts to verify the accuracy and availability of the advertised terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. Click here for rate criteria by loan product.

Loan Terms for Bankrate.com Customers: Advertisers may have different loan terms on their own website from those advertised through Bankrate.com. To receive the Bankrate.com rate, you must identify yourself to the Advertiser as a Bankrate.com customer. This will typically be done by phone so you should look for the Advertisers phone number when you click-through to their website. In addition, credit unions may require membership.

Loans Above $548,250 May Have Different Loan Terms: If you are seeking a loan for more than $548,250, lenders in certain locations may be able to provide terms that are different from those shown in the table above. You should confirm your terms with the lender for your requested loan amount.

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Current 30-year refinance rates

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

Product	Interest Rate	APR
30-Year Fixed Rate	3.080%	3.300%
30-Year Fixed-Rate VA	2.770%	2.940%
20-Year Fixed Rate	2.980%	3.150%
15-Year Fixed Rate	2.360%	2.650%
7/1 ARM	3.270%	3.830%
5/1 ARM	3.240%	3.870%
10/1 ARM	3.420%	4.130%
30-Year Fixed-Rate FHA	2.850%	3.710%
30-Year Fixed-Rate Jumbo	3.090%	3.210%
15-Year Fixed-Rate Jumbo	2.360%	2.430%

Product	Interest Rate	APR
30-Year Fixed Rate	3.150%	3.300%
30-Year Fixed-Rate VA	2.770%	2.980%
20-Year Fixed Rate	3.040%	3.190%
15-Year Fixed Rate	2.400%	2.610%
7/1 ARM	3.210%	3.840%
5/1 ARM	3.290%	3.980%
10/1 ARM	3.160%	4.040%
30-Year Fixed-Rate FHA	2.840%	3.710%
30-Year Fixed-Rate Jumbo	3.160%	3.230%
15-Year Fixed-Rate Jumbo	2.410%	2.470%

Rates as of Saturday, June 12, 2021 at 6:30 AM

How Bankrate mortgage and refinance rates are calculated

Lenders nationwide provide weekday mortgage rates to our comprehensive national survey to bring you the most current rates available. Here you can see the latest marketplace average rates for a wide variety of purchase loans. The interest rate table below is updated daily to give you the most current purchase rates when choosing a home loan. APRs and rates are based on no existing relationship or automatic payments. For these averages, the customer profile includes a 740 FICO score and a single-family residence. To learn more, see understanding Bankrate rate averages.

Why trust Bankrate?

Bankrate has been the authority in personal finance since it was founded in 1976 as the “Bank Rate Monitor,” a print publication for the banking industry. Bankrate has been surveying and collecting mortgage rate information from the nation’s largest lenders for more than 30 years. Hundreds of top publications, such as The New York Times, Wall Street Journal, CNBC and others, depend on Bankrate as a trusted source of financial information, so you know you’re getting information you can trust.

Will 30-year refinance rates increase?

Mortgage rates hit record lows in early 2021. Economists expect mortgage rates to rise as the economy improves. However, the trajectory of mortgage rates is notoriously difficult to predict.

How do I view personalized 30-year fixed refinance rates?

To customize the rates you see, adjust the categories at the top of the page to reflect the type of loan you’re looking for, where you live, how much you want to borrow, how much you have for a down payment and your credit score.

You can see personalized 30-year fixed refinance rates plus articles, calculators, prequalified offers and more by signing up for a free Bankrate account. It only takes a few minutes and you’ll get valuable tools and information tailored around your unique interests.

Why comparing rates is important

Mortgage rates and closing costs can vary widely from lender to lender, so it’s important that you shop around before. In a report published in 2018, mortgage giant Freddie Mac said borrowers could save an average of $1,500 over the life of the loan by getting one additional rate quote, and an average of $3,000 by seeking out five quotes.

Top 5 Bankrate 30-year refinance lenders

Methodology

Bankrate helps thousands of borrowers find mortgage and refinance lenders every day. To determine the top mortgage lenders, we analyzed proprietary data across more than 150 lenders to assess which on our platform received the most inquiries within a three-month period. We then assigned superlatives based on factors such as fees, products offered, convenience and other criteria. These top lenders are updated regularly.

Better.com – Best online lender
Cardinal Financial Company – Best for low-credit score borrowers
Interfirst Mortgage Company – Best non-bank lender
LoanDepot – Best no-fee lender

AmeriSave Mortgage Corporation – Best overall

Better.com – Best online lender

Better.com, also known as Better Mortgage, is an online mortgage lender available in the majority of states offering 30-year purchase and refinance options. The lender is one of Bankrate’s picks for best mortgage lenders overall, as well as best lenders for refinancing and cash-out refinancing.

Strengths: Like most mortgage lenders, Better.com can do rate-and-term and cash-out refinancing. You can receive a refi rate quote in seconds online, and take advantage of an on-demand rate-lock. The lender also doesn’t charge an origination fee.

Weaknesses: You won’t be able to refinance a VA or USDA loan.

Read Bankrate's Better.com mortgage review

Cardinal Financial Company – Best for low-credit score borrowers

Cardinal Financial Company, which also operates as Sebonic Financial, offers the full suite of refinance options, including rate-and-term, cash-out and streamline.

Strengths: Cardinal Financial’s proprietary system Octane allows you to easily compare refinance rates and follow a customized to-do list to keep the refi process on track. Depending on loan product, the lender accepts credit scores as low as 550, 580 or 620.

Weaknesses: You’ll have to go through a loan officer to get set up with Octane and find out what rates you’ll qualify for.

Read Bankrate's Cardinal Financial Company mortgage review

Interfirst Mortgage Company – Best non-bank lender

Interfirst Mortgage Company (Chicago Mortgage Solutions LLC) is a direct, wholesale and correspondent lender available in 24 states and Washington D.C.

Strengths: An Interfirst Mortgage Company loan officer guides you through the application process, and according to the lender’s website, it takes just a few minutes to obtain a refinance rate quote. The lender also boasts faster-than-industry-standard closing timelines.

Weaknesses: Interfirst Mortgage Company isn’t available in every state, and you’ll need to connect with a loan officer to get quotes.

Read Bankrate's Interfirst Mortgage Company reviews

LoanDepot – Best no-fee lender

LoanDepot offers conventional, FHA and VA loans through both branch locations (more than 200 nationwide) and online. It is currently one of Bankrate’s best cash-out refinance lenders.

Strengths: LoanDepot rewards borrower loyalty with its Lifetime Guarantee: After you refinance with the lender the first time, you won’t have to pay lender or appraisal fees on any additional refinances. In addition, if your credit needs some work or if you’re underwater on your mortgage, the lender has refi options that can help.

Weaknesses: You can’t compare daily interest rates online, unlike some competitors.

Read Bankrate's LoanDepot review

AmeriSave Mortgage Corporation – Best overall

AmeriSave Mortgage Corporation is an online mortgage lender — one of Bankrate’s top picks in the space — licensed in 49 states.

Strengths: AmeriSave Mortgage Corporation offers rate-and-term and cash out refinancing with fast prequalification and turnaround times (“days, not weeks,” according to the lender’s website). Notably, the lender promises to match both the rate and closing costs of a competitor through its Rate Match Guarantee program (or pay you $500).

Weaknesses: AmeriSave Mortgage Corporation charges a $500 non-refundable application fee. AmeriSave Mortgage Corporation review

What you need to know about 30-year mortgage refinances

What is a 30-year fixed refinance mortgage?

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 lets you 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.

When should you consider a 30-year 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 over the long term. In some cases, refinancing will accomplish both of those goals, but not always. With rates at record lows, millions of homeowners could benefit from refinancing. 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 increases 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 whether to extend you a refinance offer, including the amount of equity you currently have in the home, your income and your credit score.

Of course, there are other reasons for choosing to refinance. A common reason is to tap into home equity. If you have enough equity in your home (at least 20 percent), 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. Opting for a 30-year cash-out refinance not only provides a chunk of cash for major expenses, but it also frees up cash.

A 30-year refinance term presents many benefits. But whether it makes sense for you to refinance into a 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 percent. 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 percent, 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 emphasizes 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. These expenses will 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.

Pros and cons of a 30-year fixed refinance loan

Pros of a 30-year refi:

Lower monthly payments: By stretching out the loan over three decades, you get lower monthly payments compared with shorter loan terms.
Provides more monthly cash flow: If you need money to pay down student loans or invest, the 30-year fixed gives you the most flexibility.
Plenty of choices: The 30-year fixed is the most popular type of mortgage, so there’s no shortage of lenders and loan programs to choose from.

Cons of a 30-year refi:

More total interest paid over the life of the loan: Those lower payments come with a downside — you’re paying a lot of interest over the term of a 30-year loan.
Longer terms have slightly higher mortgage rates overall: Lenders are taking on more risk by extending a rate for three decades, so 30-year loans carry higher interest rates than 15-year loans.
It takes longer to gain equity: A 30-year repayment schedule means you’re paying down the balance at a slower pace so not only will it take longer to build equity but the interest paid each month will also decline at a slow pace.

Learn more about 30-year mortgage refinancing

Written by: Jeff Ostrowski, senior mortgage reporter for Bankrate

Jeff Ostrowski covers mortgages and the housing market. Before joining Bankrate in 2020, he wrote about real estate and the economy for the Palm Beach Post and the South Florida Business Journal.

Loan Type	Purchase Rates	Refinance Rates
The table above links out to loan-specific content to help you learn more about rates by loan type.
30-Year Loan	30-Year Mortgage Rates	30-Year Refinance Rates
20-Year Loan	20-Year Mortgage Rates	20-Year Refinance Rates
15-Year Loan	15-Year Mortgage Rates	15-Year Refinance Rates
10-Year Loan	10-Year Mortgage Rates	10-Year Refinance Rates
FHA Loan	FHA Mortgage Rates	FHA Refinance Rates
30-Year FHA Loan	30-Year FHA Loan Rates	30-Year FHA Refinance Rates
VA Loan	VA Mortgage Rates	VA Refinance Rates
ARM Loan	ARM Mortgage Rates	ARM Refinance Rates
5/1 ARM	5/1 ARM Rates	5/1 Refinance Rates
7/1 ARM	7/1 ARM Rates	7/1 Refinance Rates
10/1 ARM	10/1 ARM Rates	10/1 Refinance Rates
Jumbo Loan	Jumbo Mortgage Rates	Jumbo Refinance Rates
30-Year Jumbo Loan	30-Year Jumbo Loan Rates	30-Year Jumbo Refinance Rates